OUR QUEST IS NOT TO BE BULLISH OR BEARISH, BUT TO CORRECTLY ASSESS FUTURE TRENDS

Citi rates BHP as Neutral

Citi notes iron ore prices have remained above the previous decade's average since 2020, raising questions over whether stronger supply will eventually rebalance the market.

China drove significant supply growth during the mining supercycle, when iron ore capital expenditure increased elevenfold between 2004 and 2012, the broker explains. It's noted FY25 expenditure remained around one-third below its 2014 peak.

Even allowing for recent growth, Citi points out iron ore capital expenditure remains further below its peak than investment in any other major commodity in China.

Target $62.50. Neutral.

Macquarie rates EVN as Neutral

Macquarie notes Evolution Mining is hosting an Investor Day along with an asset tour to Cowal and Northparkes on Sept 15-17.

The analyst anticipates an exploration update will be announced with the last one five months ago, and including Evolution ramping up exploration spending by 65% to around $145m in FY27.

A Neutral rating is retained with a higher target of $14, up 12% with possible NAV upgrades post the Cowal/Northparkes site tours.

Morgans rates GNC as Upgrade to Accumulate from Hold

Morgans upgrades GrainCorp to Accumulate from Hold due to the share price weakness post update, and a better outlook for FY27, with a higher target of $7.48 from $5.62.

The analyst believes the market was looking for more than just confirmation of FY26 at yesterday's update, with a further -$30m of systems transformation costs not boosting sentiment.

A combination of a larger than expected grain crop for 2026/27, improving canola crush and grain trading markets as well as business transformation positives, the outlook for FY27 earnings is good, the broker states.

GrainCorp is viewed as a hedge on geopolitics and rising grain prices but El Nino remains a "key risk", Morgans highlights.