BHP Shares: Analysts Upbeat on Mining Giant

BHP Group (LON: BHP) has seen a wave of optimism from investment banks this week, with analysts at Morgan Stanley and Bernstein upgrading their ratings for the stock, while Argus maintained a Buy rating despite cutting its BHP price target.

Long-Term Fundamentals Remain Strong

Despite lowering the price target from $68 to $60 in a note Thursday, Argus analyst John Eade maintained a Buy rating on BHP, highlighting the company's strong long-term fundamentals.

Argus expects BHP to benefit from a rebound in global economic growth. While acknowledging the recent decline in materials prices, a sector BHP is heavily reliant on, Argus predicts an upswing in the coming quarters.

BHP Well-Positioned for Growth

Morgan Stanley upgraded BHP to Overweight from Equal Weight in a note this week, citing a potential for significant gains as Australia enters its peak season.

The bank's analyst, Rahul Anand, also raised the price target for the stock to 2,429p from 2,300p a share, stating that the recent underperformance of BHP shares was a key factor in the upgrade.

Morgan Stanley believes the market has fully priced in potential risks surrounding growth and capital expenditure, with a likely resolution for the Samarco dam disaster case.

Positive Catalysts Expected over the Next Year

Finally, Bernstein upgraded BHP to Outperform from Market Perform, pointing to a confluence of positive factors for the company.

The firm said in a research note that its observations suggest iron ore prices, a crucial commodity for BHP, may have reached an attractive entry point.

Additionally, Bernstein hosted BHP leadership for investor meetings, leading them to expect positive company-specific catalysts to emerge within the next year. They stated that following the meetings, they now expect positive BHP-specific catalysts to unfold over the next year.

The analyst upgrades signal a renewed bullish sentiment towards BHP. While the price target from Argus was lowered, the maintained Buy rating suggests confidence in the company's long-term prospects. Morgan Stanley and Bernstein's upgrades highlight BHP's potential for growth.