It has been a busy year for the coal, copper and iron miner, which last month declared a record dividend pay-out following a 33% jump in profits.
The FTSE 100 group disposed of its US shale gas assets for US$10.7bn over summer, while the rebounding oil prices – BHP is an oil producer as well as a miner – and improved operational performance have all contributed to the strong 2018 so far.
Unfortunately for investors, Deutsche analyst Liam Fitzpatrick acknowledges the strong share price performance since the turn of the year but reckons most of the “major near-term catalysts are behind us”.
He does, however, think there is room for BHP to get rid of some of its other non-core assets from its portfolio.
“After spinning out South 32 in 2015 (US$9.4bn) and recently selling US Onshore (US$10.7bn), BHP is more simplified but not yet simple,” wrote the analyst in a note to clients.
“We still see other assets in the portfolio that are, like the South 32 assets previously, likely to receive less capital than the major divisions. These include Nickel West, the Australian oil/gas assets and NSW Energy Coal.”
Fitzpatrick isn’t convinced that management will push ahead with these and certainly not at a pace he would like.
“The pace of simplification is clearly slowing and management's recent commitment to the remaining oil/gas portfolio suggests that longer term (FY21+) capex could move above the US$8bn per annum ceiling set for FY19/20.”
Fitzpatrick dropped his rating to ‘hold’ from ‘buy’, while he also lowered his price target to 1,800p from 1,860p.
Shares fell 2% to 1,484p on Tuesday morning.