BHP shares (ASX: BHP) pushed 1.57% higher to A$62.86 on Tuesday, in a move that hides plenty going on under the surface. After hitting A$68.77 late in August, September closed more than 8% lower, as the stock moved into correction territory. Having re-established support at A$60, there was the question of the A$62 resistance level that had previously provided a ceiling all the way back in May, and more recently during September’s attempts higher.
The BHP share price moved swiftly beyond the resistance level, and also regained a couple of key momentum markers in the process, breaking above both the 30 day and 50 day SMA’s at A$62.46, and A$62.68 respectively.
Fundamentals Remain Supportive
The fundamental backdrop has been firmly supportive of the move, with BHP’s full-year results in August delivering record iron ore volumes, roughly 2 million tonnes of copper for a second straight year, a strong lift in underlying earnings and the largest final dividend in four years, with net debt held below US$9 billion.
Copper now accounts for more than half of group earnings, and management has laid out a growth program targeting around 40% copper-equivalent production growth by FY2035. That has cemented BHP’s positioning as a structural energy-transition play, giving portfolio managers a reason to keep adding on resource-sector strength even with commodity prices choppy. The company’s own outlook commentary, stressing resilient demand in the United States and China, has helped investors look through shorter-term price noise.
What Next?
Looking to the analyst community, and the average price target at A$60.89 points lower, and the average rating is a Hold across 15 brokers. With a price-to-earnings multiple of 22.5 times for a cyclical miner and a dividend yield near 4%, the Street view reads as “good business, not obviously cheap”.
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There is another momentum signal worth noting, with the MACD line having just crossed above its signal line, though both remain in negative territory, suggesting a gentle pick-up within the trend rather than an explosive breakout. The mid-60s to high-60s band, where the stock has previously met supply, looms as the natural test for this leg of the rally if the macro backdrop holds.
Bull Case:
- Copper now drives over half of earnings, with 40% production growth targeted by FY2035.
- Record iron ore volumes and biggest final dividend in four years underpin shareholder returns.
- Price holds above rising 50-day and 200-day averages, confirming an established uptrend.
Bear Case:
- Consensus target near A$60.89 sits below the share price, limiting broker support.
- FY27 copper guidance cut and Escondida grade decline cloud the medium-term growth path.
- Jansen’s US$8.4 billion cost and normalised margins raise execution and valuation risk.
