Zacks Investment Research upgraded shares of BHP Billiton Limited (BHP) from NEUTRAL to OUTPERFORM on March 24, 2014, with a target price of $78.00.
BHP Billiton has been successfully reducing costs on lower commodity prices and increased yield. In the first half of fiscal 2014, underlying EBITDA increased 16%, while EBIT increased 15%, year over year. In the same time period, the company reported record iron ore production in the WAIO segment, along with record production in the Queensland coal mines. The company has 10 more projects in its pipeline which are expected to start production in fiscal 2015. Moreover, the company has a strong balance sheet, which it intends to utilize for enhancing shareholders value. The company's long-term debt is also expected to reduce further in the forthcoming quarters. Based on these factors, we are upgrading our recommendation to Outperform from Neutral.
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