BHP Billiton Growth Prospects Bright: Time To Buy The Stock?

On Jun 21, 2016, Zacks Investment Research upgraded BHP Billiton (LON:BLT) Limited (NYSE:BHP) to a Zacks Rank #2 (Buy) from a Zacks Rank #3 (Hold). Going by the Zacks model, companies with a Zacks Rank #2 are likely to perform better than the broader market over the next quarters.

Why the Upside?

BHP Billiton has established a new operating model to make its business more secure in the disturbed mining market. Per the new model, the company is concentrating on three aspects of assets – safety, cost and volume. Moreover, the company is on track to geographically diversify its business through rapid expansion. In addition, the recent de-merger of South32 and optimal asset disinvestment have been helping the company to attain greater operational efficacy and to enhance productivity in operations.

Also, BHP Billiton has introduced a new strategy to enhance shareholders’ returns and value in the near term. The company expects the new strategy of implementing efficient cost-reduction programs to garner savings worth $3.6 billion by the end of 2017. The savings would be used to fund future productivity enhancement plans. Such productivity gains, coupled with the company’s continuous attempt to encourage new exploration activities and innovations, are expected to support top-line and bottom-line growth.

Over the last 60 days the Zacks Consensus Estimate for the stock has decreased by 23.5% to 21 cents for 2016 but increased 18.2% to 65 cents for 2017.

Other Stocks to Consider

BHP Billiton presently holds a Zacks Rank #2 (Buy). Other well-ranked stocks in the industry include Antofagasta (LON:ANTO) plc (OTC:ANFGY) , McEwen Mining Inc. (TO:MUX) and Lonmin plc (OTC:LNMIY) .

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