The BHP Group Ltd (ASX: BHP) share price has come under significant pressure on Thursday morning.
In early trade, the mining giant’s shares are down 7% to $41.71.
This means BHP’s shares are now down 21% since this time last month.
Why is the BHP share price sinking today?
There are a couple of reasons why the BHP share price is underperforming today.
One of those is further weakness in the iron ore price after curtailed steel production in China hit demand for the base metal.
According to CommSec, the spot iron ore price fell 5.9% or US$9.05 overnight to US$143.55 a tonne.
It is for this reason that the shares of fellow mining giant Rio Tinto Limited (ASX: RIO) are trading lower today.
What else is weighing on its shares?
But arguably the biggest weight on the BHP share price today is the fact that it is trading ex-dividend this morning.
This means that the company’s shares are now trading without the rights to its upcoming dividend. As a result, new buyers of BHP shares will not be entitled to this dividend and its share price has fallen to reflect this.
Eligible BHP shareholders can look forward to receiving the Big Australian’s record fully franked final dividend of 273.6 cents per share later this month on 21 September.
Is this a buying opportunity?
One leading broker that sees a lot of value in the company’s shares at the current level is Macquarie.
In the middle of last month, the broker retained its outperform rating but trimmed its price target slightly to $58.00.
Based on the latest BHP share price, this implies potential upside of 39% over the next 12 months. Macquarie is also forecasting generous dividends in FY 2022 and FY 2023.
The post Here’s why the BHP (ASX:BHP) share price is down 7% today appeared first on The Motley Fool Australia.
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More reading
- 5 things to watch on the ASX 200 on Thursday
- ASX 200 company bosses lobby for reopening plan
- BHP (ASX:BHP) share price struggles as nickel battle heats up
- 11 straight months of gains for ASX 200. Scott Phillips on Nine’s Late News
- BHP (ASX:BHP) share price history: The major highlights (and low points)
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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