Goldman Sachs is expecting BHP returns to remain at current levels despite falling commodity prices, thanks to cost cutting and productivity measures.
Analysts told investors last night that mining sector stocks were reaching a base level of support after two years of volatility.
“The sector is potentially finding a base level of support … as ‘self-help’ measures through cost savings and improving asset productivity initiatives start to be realised,” according to Goldman Sachs.
“Non-core asset sales and asset rationalisation initiatives have the potential to further enhance returns for BHP and RIO.”
Goldman Sachs analysts picked BHP, First Quantum and Southern Copper as the best-returning companies globally, and BHP, Iluka Resources and Regis Resources as their top metals and mining stocks on the ASX.
BHP opened up 1.97%, at $31.55, today and has continued to trade around that level as of noon.
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