BHP will release its 2Q FY17 production report tomorrow. We anticipate the strength in iron ore, coal and copper will likely see production tracking in-line with FY17 guidance.
The forecast for FY17 revenue of US$40b and net profit of $6.8b should generate an EPS of $1.25, which will place the stock on a 3.3% forward yield.
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We remain long BHP with covered call options at or near $28 into April/May as our preferred strategy.
