BHP Group Ltd did little to impress as it cut its dividend on lower first half profits, leaving Panmure Liberum analysts reiterating a ‘sell’ rating for the miner.
Though expected, according to Panmure, BHP slashed its interim dividend by US$0.22 to US$0.50 to reflect an eight-year low on Tuesday.
Underlying attributable profit had slid 23% to US$5.1 billion in the six months to December, results showed, as weak iron ore prices and Chinese demand weighed.
Panmure noted the figures were in line with consensus, but that lower shareholder rewards were reflective of where BHP currently was with cash flow generation.
That said, there was “some latching onto comments” from BHP on early signs of recovery in China, Panmure noted, including as housing sales were said to stabilise.
Jefferies and UBS failed to budge on respective ‘hold’ and ‘neutral’ ratings for BHP in the meantime, as both flagged a growing debt pile, which hit US$11.8 billion as of December.
“BHP is performing well,” UBS said, “albeit the pivot to growth is pushing up net debt and pushing down cash returns to shareholders”.
Panmure repeated a 1,650p share price target, while Jeffieries held at 2,150p and UBS stuck with 2,200p.
Shares were down 0.4% at 2,080p on Tuesday.