BHP Ltd (BHP.AX, BHP.L): Weak Copper Quarter offset by Realised Prices, Guidance Unchanged: Neutral

BHP reported September quarter copper production of 401kt (-19% QoQ), -2% vs CitiE and -5% vs consensus, on lower grades, maintenance, weather, safety stoppages and the Carrapateena conveyor failure. The miss was partly expected after Rio Tinto reported weak Escondida output. Pampa Norte and Copper SA were each -12% vs consensus, while the realised copper price of US$7.01/lb was +9% vs CitiE and +12% vs consensus, implying copper revenue +6% vs consensus. Iron ore was in line: WAIO produced 64.3Mt (-3% QoQ; +4% YoY; -1% vs CitiE), with the realised price down 9% QoQ to US$76.27/wmt; BMA was +7% vs CitiE and NSWEC +22%. All FY27 production and unit cost guidance was maintained. We expect a neutral market reaction to these results and maintain our Neutral rating, with 12-month target prices of A$64.40 for BHP.AX and £33.70 for BHP.L.