BHP Billiton

Friday 5th August 2011

Credit Suisse has cut BHP Billiton (ASX: BHP) to Neutral from Outperform, and the broker has slashed its price target to A$47 from A$58 and GBP31.60 from GBP33.00. The downgrade follows the incorporation of BHP's Petrohawk acquisition into Credit Suisse's model. Credit Suisse says "we view the stock as fairly valued with limited share price catalysts as the Petrohawk acquisition removes near-term potential for a significant capital management surprise." The broker prefers Rio Tinto over BHP.

BHP disclosed plans last month to acquire Petrohawk for $12.1 billion in one of the largest deals of the year, which would double BHP's resource base in oil and gas. Houston-based Petrohawk's assets cover about a million acres in Texas and Louisiana, with an estimated 2011 net production of about 950 million cubic feet equivalent per day.

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