Zacks Investment Research upgraded
BHP Billiton Limited
) to a Zacks Rank #1 (Strong Buy) on Mar 4, based on impressive
half-year fiscal 2014 results and a strong outlook for fiscal
Why the Upgrade?
BHP Billiton reported strong results for the first half of
fiscal 2014, backed by year-over-year hikes in earnings as well
as revenues. Adjusted earnings per American Depositary Share
(ADS) came in at $1.52, increasing 83% year over year. Reported
revenues were $33.9 billion, 6% higher than the prior-year
quarter. Strong earnings resulted from higher production and
The company expects the economy to continue to revive in the
coming quarters, mainly in China, thereby, boosting demand and
prices of iron ore. In fiscal 2014, BHP Billiton anticipates
capital and exploration expenditure to be roughly $16.1 billion.
Free cash flow is expected to increase, which can be used to
reduce debt from $27.1 billion to $25.0 billion.
Subsequent to the results, the Zacks Consensus Estimate for
earnings per share increased 4.3% to $5.34 for fiscal 2014, while
the same for fiscal 2015 increased 3.2% to $5.49, over the past
30 days, reflecting a year-over-year growth of 20.7% and 2.8%,
respectively. BHP Billiton currently has an
of 6.74% and 5.65% for fiscal 2014 and fiscal 2015,
The company expects the global energy demand to increase over
30% in the next 20 years. The growth will be driven primarily by
India, China and Africa. Also, it is believed that by 2030, 70%
of the world's energy will be supplied by oil, gas and coal. Such
a huge rise in the demand for fuel places mining companies like
BHP Billiton at an advantageous position.
Other Stocks to Consider
Apart from BHP Billiton, other stocks in the industry having a
favorable Zacks Rank include
Augusta Resource Corp.
Avalon Rare Metals Inc.
Denison Mines Corp.
). All these stocks hold a Zacks Rank #2 (Buy).
AVALON RARE MTL (AVL): Get Free Report
AUGUSTA RSRC CP (AZC): Get Free Report
BHP BILLITN LTD (BHP): Free Stock Analysis
DENISON MINES (DNN): Free Stock Analysis
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