Elliott Management Increases Investment in Barrick, Motivated by Potential for Separation, According to Source
Written by Emily J. Thompson, Senior Investment Analyst
Source: WSJ
Elliott Management's Stake: Activist investor Elliott Management has acquired a significant stake in Barrick Mining, making it one of the company's top 10 shareholders.
Pressure for Operational Changes: The investment is aimed at pressuring Barrick to consider splitting its operations, as Elliott is optimistic about the potential for a breakup.
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Analyst Views on BHP
Wall Street analysts forecast BHP stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for BHP is 54.88 USD with a low forecast of 48.00 USD and a high forecast of 68.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
4 Analyst Rating
2 Buy
1 Hold
1 Sell
Hold
Current: 70.960
Low
48.00
Averages
54.88
High
68.00
Current: 70.960
Low
48.00
Averages
54.88
High
68.00
About BHP
BHP Group Limited is an Australia-based resources company. The Company is a producer of commodities, including iron ore, copper, nickel, potash and metallurgical (steelmaking) coal. It is focused on offering a range of resources, which provides copper for renewable energy; nickel for electric vehicles; potash for sustainable farming, and iron ore and metallurgical coal for the steel needed for global infrastructure and the energy transition. Its segments include Copper, Iron Ore, and Coal. Its Copper segment is engaged in mining of copper, silver, zinc, molybdenum, uranium, and gold. Its Iron Ore segment is engaged in mining of iron ore. Its Coal segment is engaged in mining of metallurgical coal and energy coal. The Company is also focused on operating Olympic Dam, Prominent Hill, and Carrapateena underground copper-gold mines in South Australia. Its operations are situated in Australia, Europe, China, Japan, India, South Korea, rest of Asia, North America, South America, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
BHP Group Faces Up to $2 Billion Losses Due to Pricing Pressures
- Import Restrictions Impact: BHP Group faces potential losses of up to $2 billion due to China's restrictions on Jimblebar iron ore imports, primarily driven by widening discounts and plunging lump premiums, indicating a significant shift in market demand.
- Annual Contract Negotiations: The company is currently negotiating annual contract terms with China Mineral Resources Group (CMRG), which could lead to approximately $1 billion in annual losses from incremental discounts on its major iron ore fines products at spot prices.
- Lump Product Discounts: The 80% drop in premiums for Newman lump products adds another $1 billion in revenue pressure, reflecting intensified market competition and the challenges in maintaining pricing power.
- Market Strategy Adjustments: BHP stated it is optimizing product placement distribution channels and taking actions to preserve operational flexibility, which has impacted realized prices; however, the company remains committed to expanding sales in other markets, demonstrating resilience in facing challenges.
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Mining Stocks Surge as Gold and Silver Hit Record Highs
- Gold Price Surge: February gold futures hit a record high of $5,100 per ounce on Sunday, reflecting heightened investor demand for gold as a safe haven during uncertain times, which may further drive up mining stocks.
- Silver Price Highs: March silver futures reached $115.5 per ounce the following day, indicating a close correlation with gold prices that could attract more investors to the precious metals market.
- Strong Mining Stock Performance: The iShares MSCI Global Metals & Mining Producers ETF reached an all-time high of $59.58 on Monday, demonstrating strong market interest in mining stocks, although analysts express mixed views on sustainability.
- Shifting Market Sentiment: Despite mining stocks rising 20% to 50% over the past six months, a Citi report indicates buy ratings have dropped from 70 to 60, reflecting concerns over iron ore prices and the diminishing attractiveness of valuations.
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