Deutsche Bank’s mining team have begun to question BHP Group PLC’s premium rating to Rio Tinto PLC (LSE:RIO) despite both being an equivalent size and having similar commodity exposure.
It points out there are ‘technical reasons’ why BHP trades at a premium to Rio, which has also been hit by ‘challenges within its iron ore business and senior management turnover’.
However, it also believes that having ‘materially outperformed’ since 2020 following the simplification of the business, it's now time for a reality check for BHP's backers.
In a short prelude to a larger note, Deutsche crimped its price target back to 2,250p a share from 2,550p, repeating its ‘hold’ recommendation in the process.
Ignoring the mildly bearish tone of the note, traders marked the stock 1% higher to 2,570.84p.