Argus Market Digest @2026-10-13 14:17:27 - Calle 15 de Febrero

Tuesday, October 13, 2026. Analysis of financial markets and comments on BHP Group Ltd. (NYSE: BHP). Argus Research Company, 61 Broadway, New York, N.Y. 10006. Independent Equity Research Since 1934. **Market Review Summary (extracted):** Over the past two weeks, positive insider sentiment reported in weekly data from Vickers Stock Research. This week, with earnings season under way and insiders broadly prohibited from trading, Vickers data pulled back near term (one week), but impact of prior two positive weeks allowed long-term (eight-week) view to hold firm after eight weeks of improvement. On August 10, Vickers’ broadest sentiment measure, the Total Eight-Week Sell/Buy Ratio, was in negative territory at 6.64. Today the ratio has improved to 3.55 (neutral and flat with last week). Goal is to hit 2.00 or below for positive territory. On a sector basis, no repeat of last week when all 11 of Vickers’ one-week sector sell/buy ratios were bullish. Still, eight sectors are bullish this week, two are neutral, and one is bearish. Eight-week view: seven sectors bullish, four neutral, none bearish. Bullish sectors include Consumer Discretionary, Consumer Staples, Energy, Financial, Healthcare, Real Estate, and Utilities. Analysts at Vickers highlighted insider transactions of interest at Willamette Valley Vineyards Inc. (NCM: WVVI) and AgomAb Therapeutics NV (NGS: AGMB). **BHP Group Ltd. (NYSE: BHP, $86.72) — Rating: BUY** - BHP ADRs outperformed over the past three months, gaining 6% while a global market ETF, EFA, rose 3%. - Company results linked to trends in iron ore, copper, and coal. Prices firming as global inflation picks up. - From a technical standpoint, the stock is now in a bullish pattern of higher highs and higher lows dating back to April 2025. - Valuations remain attractive; 12-month target price raised to $98 from $95. **Investment Thesis (extracted):** Rating on BHP Group Ltd. (NYSE: BHP), a leading international mining company, is BUY. Long-term fundamentals are bullish; company expected to benefit from global economic growth. Revenues and earnings linked to trends in iron ore, copper, and coal, as well as other commodities. Two of these three commodities have been under pressure, which has led to reduced earnings power and a lower dividend, but the outlook is improving as the Chinese economy stabilizes (good for iron ore) and clean energy demand continues (good for copper). From a technical standpoint, the stock is now in a bullish pattern of higher highs and higher lows dating back to April 2025. Given the recent pickup in commodity prices — particularly for copper — current valuation multiples are attractive, and the shares deserve a BUY rating. Target price $98 (increased from $95). BHP shares are listed on the New York Stock Exchange in the form of American Depositary Receipts (ADRs), each of which represents two ordinary shares. **Recent Developments (extracted):** BHP ADRs outperformed over the past three months, gaining 6% while a global market ETF, EFA, has risen 3%. Shares also outperformed the benchmark over the past year, gaining 55%, compared to an advance of 25% for the index. Compared to the Basic Materials ETF, IYM, the shares have outperformed the industry over the past year and over the past five years. The beta on BHP is 1.03. BHP Group Limited is based in Australia and reports in U.S. dollars. The company posts first half and full-year results (year-end June) and gives production updates after the end of 1Q and 3Q. Fiscal FY26 (ending June 30, 2026) results were published recently. Fiscal full-year 2026 sales rose 15% year over year to $58.8 billion. Underlying EBITDA rose 27% as the underlying EBITDA margin widened 540 basis points year over year to 56.1%. Underlying EPS rose 30% year over year to $2.60. For the NYSE ADRs, earnings were $5.20 per ADR for 2026. Along with the full-year results, management provided FY27 production guidance, as follows: — Copper production of 1,650–1,800 million tons, compared to 1,953 million tons in FY26. Unit costs at the key Escondido mill are expected to be between $1.20 and $1.50 per pound, compared to $1.07 per pound in FY26. — Iron ore production of 260–272 million tons, compared to 265 million tons in FY26. Unit costs at the key WAIO mill are expected to be in the range of $20.25–$21.75 per ton, compared to $19.66 per ton in FY26. — Steelmaking coal production of 18.5–20.5 million tons, compared to 18.6 million tons in FY26. Coal costs are expected to be in the range of $126–$137 per ton in FY27 compared to $134.05 per ton in FY26. Company results linked to pricing trends in iron ore, copper, and aluminum, as well as other commodities. At $102 per ton, the price of iron ore is down 15% year over year. Iron ore prices are low compared to the past five years, as the price per ton has ranged from $80 to $150. At $6.71 per pound, the price of copper is up 31% year over year. Over the past five years, the price per ton has ranged from $3.24 to $6.70; current prices are at the high end of the range and have been on a bullish uptrend since mid-year 2022 due to clean energy demand, growth in electronics markets, and the data center buildout. The price of coal at $149 per ton is up 42% year over year, though it is still near the low end of the five-year range of $95 to $440. A pick-up in the Chinese economy would likely send the prices of iron ore, copper, and coal higher. **Earnings & Growth Analysis (extracted):** BHP has an uneven recent history of growth. The company’s top-line has declined at an average 4% rate over the past five years. Adjusted EPS has declined at an average rate of 9%. The underlying EBITDA margin over the past five years has ranged from 46.7% to 61.5%. The company operates three main segments: Copper (about 49% of 2026 revenue), Iron Ore (41%), and Coal (10%). Fiscal full-year 2026 sales rose 15% year over year to $58.8 billion. Copper sales rose 29% on a 35% increase in the average realized price; Iron Ore sales rose 4% on a 3% increase in the average realized price; and Coal sales rose 11%. Underlying EBITDA rose 27% as the underlying EBITDA margin widened 540 basis points year over year to 56.1%. The company uses underlying ROCE to measure productivity of its businesses. For the full year, overall underlying ROCE was 26.1%, up from 20.6% in the prior year. ROCE for Copper was 26%, up from 17% in the prior year, while ROCE for Iron Ore was 41%, down from 43% in the prior year. Turning to estimates, underlying EPS rose 30% year over year in FY26 to $2.60. For the NYSE ADRs, earnings were $5.20 per ADR for the year. Looking ahead, based on the company’s production targets and our commodity pricing forecasts, we are lowering our FY27 underlying earnings estimate per ADR to $5.30 from $5.40. Our estimate implies an EPS increase of 2% for the year. We expect a slightly slower year in FY28 and are setting our earnings estimate at $5.00 per ADR. **Financial Strength & Dividend (extracted):** We rate BHP’s financial strength as Medium-High, the second-highest rank on our five-point scale. The company receives above-average scores on our key financial strength criteria of debt levels, fixed-cost coverage, profitability, cash flow generation, and earnings quality. Net debt was $12.9 billion at the end of FY25. The gearing ratio at year-end was 19.8%. Net operating cash flow for the year was down 10% year over year to $18.7 billion and free cash flow was down 55% to $5.3 billion. The underlying return on capital was 20.6%. BHP Group pays a semiannual dividend, though the actual payment depends on business conditions. The company’s policy is to pay out at least 50% of earnings as a dividend. For FY26, BHP determined a final dividend of $1.98 per share, implying a 72% payout ratio. This brought the final dividend payment to $3.44 per ADR. Our dividend estimates are $3.68 per ADR for FY27 (up from $3.24) and $3.88 per ADR for FY28. **Management & Risks (extracted):** BHP Group is undergoing a management transition. Brandon Craig became the new CEO on July 1. He succeeds Mike Henry, who has been CEO for six years. Previously, Craig was president of the company’s Americas division. Vandita Pant became the company’s CFO in March 2024. Edgar Basto has been COO since October 2022. Ross McEwan, the former CEO of National Australia Bank, is the chairman of the board. BHP investors face risks related to global economic conditions; trends in commodity, energy, and currency prices; and the cyclical nature of the company’s business. Management is mindful that the world is rapidly changing, with the decarbonization of energy sources, population growth, and rising living standards in the developing world as key growth drivers. The company is global and faces different regulatory environments in the countries in which it operates. **Company Description (extracted):** BHP, based in Australia, is the world’s largest diversified natural resources company by market capitalization, with over 39,000 employees and contractors, primarily in Australia and the Americas. BHP’s primary commodities include copper, iron ore, and metallurgical coal. It also has substantial interests in conventional and unconventional oil and gas and thermal coal. **Industry (extracted):** Our rating on the Materials sector is Over-Weight. The sector accounted for 1.7% of the S&P 500 as of the end of September. Despite the energy price shock rippling through the global economy, demand for commodities remains solid, and commodity-producing nations have some of the strongest stock markets worldwide. Additionally, U.S. dollar weakness is positive for commodity prices, given that most commodities are priced in dollars and given the inverse relationship between commodity prices and the direction of the dollar. The sector receives above-average marks on our six-part “blind” sector rating criteria, which includes growth momentum, valuation, financial strength, and analyst conviction, among other factors. The sector has underperformed the market year to date with a gain of 7.5% as of the end of September. The sector underperformed in 2025, with a gain of 8.4%, compared to a gain of 16.4% for the S&P 500. The beta for the sector is 0.9. Over the past five years, the sector’s weighting has ranged from 1% to 4%. The sector’s P/E ratio on projected 2027 EPS was 23, above the market multiple. The yield of 1.3% was above the market average. The sector’s smoothed earnings growth rate of 4% was below the market average. The Materials sector is primarily a cyclical, value-oriented sector. The macroeconomic factors that may affect the performance of stocks in the Materials sector include Tariffs, Input Costs, Interest Rates, and Trade Policy, among others. Trends in the dollar can affect factors such as Gross Profits. Many Materials companies return capital to shareholders in the form of dividends. High yields may be attractive, but investors also need to look closely at financial strength factors such as dividend coverage and debt levels. Potential sell signals for stocks in the Materials sector can be an impending recession, a supply glut for a specific commodity, or a weakened balance sheet that threatens the dividend payout. At this stage of the market and economic cycle, our favored industries within the Materials sector include: Specialty Chemicals, Steel, and Industrial Gases. **Valuation (extracted):** We think that BHP ADRs are favorably valued at current prices near $87. Over the past 52 weeks, the ADRs have traded between $52 and $99. From a technical standpoint, the stock is now in a bullish pattern of higher highs and higher lows dating back to April 2025. On the fundamentals, BHP ADRs trade at 16-times our 2027 EPS estimate, at the high end of the historical range of 7–17. They are also trading at the high end of the historical ranges on price/sales (3.8x with a range of 2.1–3.9) and price/book (4.5x with a range of 2.7–4.5). Compared to a group of peers including RIO, FCX, NEM and USAR, the shares are generally average. Given the recent pickup in commodity prices — particularly copper — we think that the current multiples are attractive, and the shares deserve a BUY rating. Our target price is now $98. On October 12, BUY-rated BHP closed at $86.72, down $0.02. (Alexandra Yates, 10/12/26) **Disclaimer (extracted verbatim from source):** Argus Research Co. (ARC) is an independent investment research provider whose parent company, Argus Investors’ Counsel, Inc. (AIC), is registered with the U.S. Securities and Exchange Commission. Argus Investors’ Counsel is a subsidiary of The Argus Research Group, Inc. Neither The Argus Research Group nor any affiliate is a member of the FINRA or the SIPC. Argus Research is not a registered broker dealer and does not have investment banking operations. The Argus trademark, service mark and logo are the intellectual property of The Argus Research Group, Inc. 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Timestamp context: Monday. **Unsolicited Commercial Email Record — Cloudflare Connect Communication** Cloudflare, Inc. is a publicly traded company (ticker: NET) operating a global network of data centers. The referenced communication is a commercial promotional email for the Cloudflare Connect event, utilizing the promotional code “LASTCHANCE” for a $100 discount on tickets. Parallel public posts from official Cloudflare accounts on the same date range promote the identical code and event. Community forum records document multiple instances of commercial emails originating from Cloudflare domains, including business-development outreach and event promotions, received by account holders who report having marketing preferences disabled in their Cloudflare account settings. 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No additional data fields are present in the source images or search-derived records regarding volume rankings of global unsolicited commercial email originators attributable to Cloudflare as sender. Fiveo1 PO Box 312786 Avalon California 90704 Evan Winter