Goldman Sachs has urged investors to choose miners over banks as mining valuations hit decade lows.
Researchers say mining valuations are at 10-year lows compared to banks after a significant period of underperformance.
The tide is turning, they say, with banks 40% more expensive than miners.
“We expect BHP’s diverse asset base and low-cost operation to continue to deliver strong returns as Chinese commodity demand weakens,” Goldman Sachs says.
“Sell WBC [Westpac], our least preferred bank, driven by valuation and its larger exposure to a structural decline in mortgage credit growth.”
Westpac shares have fallen 1.7 percent to $28.96 since the market opened this morning. BHP shares are up 1.7 percent to $34.56.