BHP share price: what to expect from FY21 results

BHP Group results expected to be boosted by record production in key areas and higher commodity prices over the reporting period.

When are the BHP Group results?

The BHP Group, global resources company, is scheduled to release financial year 2021 (FY21) results on Tuesday 17 August 2021. The earnings release will cover the group’s forth quarter (Q4) and full-year results.

What to expect from the BHP Group results?

A recent production update from BHP for FY21 has highlighted the following:

  • Petroleum production contracted by 6% year on year (YoY)
  • Copper production contracted 5% YoY
  • Iron ore production increased by 2% YoY
  • Metallurgical coal production contracted by 1% nYoY
  • Energy coal production decreased by 17% YoY
  • Nickel production increased by 11% YoY

Iron ore remains the most significant contributor to BHP earnings with the division accounting for more than two thirds of group earnings before interest tax depreciation and amortisation (EBITDA). Western Australian Iron Ore (WAIO) saw a 1% production increase YoY for the group, despite disruption from inclement weather and Covid-19-induced logistical constraints. Over the reporting year while currency translations might have provided a negative headwind, a more than 50% gain in the price of the underlying commodity (iron ore) would have been extremely accretive to earnings.

A consensus of estimates compiled by Refinitiv data arrives at the following forecasts for the upcoming earnings:

How to trade the BHP Group results

A poll of 22 analysts maintain a long-term average rating of ‘buy’ for the BHP Group (as of 16 August 2021).

BHP share price – technical analysis view

The share price of the BHP Group remains within a broad sideways rangebound environment (1980 support and 2405 resistance). A recent bearish reversal from resistance and overbought territory, now sees the share price moving towards initial support at 2205.

Traders looking for long entry into BHP might hope to see a bullish price reversal from oversold territory around either the 2205 or 2130 level before targeting a move back towards range resistance at 2405.

In the event of no bullish price reversals before the 2205 or 2130 levels, and if instead a close below the 2130 level was to occur, the 1980 range support level would become a further downside target from the move.

The share price of the BHP Group remains within a slow moving upward channel. A recent bearish reversal from a near-term high and overbought territory, now sees the share price moving towards initial support at $48.75.

Traders looking for long entry into BHP might hope to see a bullish price reversal from oversold territory around $48.75 before targeting a move back towards channel resistance.

In the event of no bullish price reversal before the $48.75 level, and if instead a close below this level was to occur, the $46.85 channel support level would become a further downside target from the move.

The share price of the BHP Group remains within a broad sideways rangebound environment (40945 support and 49560 resistance). A recent bearish reversal from resistance and overbought territory, now sees the share price moving towards initial support at 45800.

Traders looking for long entry into BHP might hope to see a bullish price reversal from oversold territory around either the 45800 or 44000 level before targeting a move back towards range resistance at 49560.

In the event of no bullish price reversals before the 45800 or 44000 levels, and if instead a close below the 44000 level was to occur, the 40945 range support level would become a further downside target from the move.

Summary

  • The BHP Group results are scheduled for release on 17 August 2021
  • FY21 revenue of $60.47 billion (+40% YoY) expected
  • FY21 EBITDA of $37.95 billion (+72% YoY) expected
  • FY21 EPS of $3.47 (+95%) expected
  • The average broker rating for the BHP Group is ‘buy’
  • The share price of the BHP Group is currently retracing from resistance, although the broader picture suggests the price to still be rangebound in nature

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