BHP Buyback on the Cards, Says JP Morgan -- Market Talk
25 July 2014 - 9:51AM
Dow Jones News
2320 GMT [Dow Jones] An increasingly cashed-up BHP Billiton Ltd.
(BHP.AU) is likely to announce plans for a buyback worth around
US$3 billion at its results next month, tips J.P. Morgan analyst
Lyndon Fagan. "An expected circa US$2.3 billion of excess capital
through FY15 should leave the company well placed to approve an
on-market PLC buy-back when it reports on Aug. 19," he says. Fagan
rules out the potential for a special dividend, citing its track
record of preferring buybacks. For peer Rio Tinto PLC (RIO), he
says management will likely have to wait until 2016 before any such
move, given the decline in iron-ore prices. Nevertheless, Fagan
expects BHP's capital management will likely be only 1% EPS
accretive, so continues to favor RIO on which he keeps an
overweight rating. He retains a neutral recommendation on BHP.
(rhiannon.hoyle@wsj.com; Twitter: @RhiannonHoyle)
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