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BHP Billiton (full-year results 20 August)
BHP Billiton is expected to report a 37% rise in earnings per share for the year, to $1.73, while revenue is expected to rise 19% to $45.55 billion. The average move on results day is 2.6%, while current options pricing suggests a move of 3.7%. The sale of US onshore oil and gas assets mean that the firm may well boost capital return as part of the $10.5 billion proceeds from the sale. Meanwhile, a more broadly positive outlook for the iron ore price should help the firm to remain optimistic on the outlook, even if trade wars do end up featuring as they did in Antofagasta's numbers. At 12.2 times forward earnings the shares trade comfortably below their five-year average of 16.7, suggesting more upside in the share price in the medium term.
The shares were knocked back sharply in the wake of Antofagasta’s numbers in mid-August, falling towards the £16.00 support zone. If this holds as it has done since late June, a bounce back towards £17.50 could be in the offing, and then to the high of the year at £18.00. Below the £16.00 zone, rising trendline support would come into view around £15.00.
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