The BHP Group Ltd (ASX: BHP) share price returned to form on Tuesday and charged notably higher.
The mining giant's shares climbed a sizeable 6% to finish the day at $29.25. This compares to a solid 3.1% gain by the ASX 200 index.
Why did the BHP share price charge higher?
Investors were snapping up the miner's shares today after taking advantage of a sharp pullback this week which left them trading at a two-year low of $26.86.
When BHP's shares hit that level, it meant they had fallen a massive 36% from their 52-week high of $42.33.
Also supporting the buy side was a broker note out of the Macquarie Group Ltd (ASX: MQG) equities desk this morning.
According to the note, its analysts have retained their outperform rating and $42.00 price target on the Big Australian's shares.
Even after factoring in today's sizeable gain, this price target implies potential upside of over 43% for its shares over the next 12 months.
And this excludes dividends, which Macquarie expects to be in the region of $1.96 per share in FY 2020. This is the equivalent of a fully franked 6.7% dividend yield based on today's close price.
The broker appears to believe that BHP's shares are trading at a very attractive level, especially given its modest exposure to petroleum and favourable iron ore prices. The former could mean the market overreacted to the oil price collapse on Monday when they sold off its shares.
I think Macquarie is spot on and would be a buyer of BHP's shares at these levels.
Other mining shares jump.
It wasn't just BHP storming higher today. A number of other mining shares also rebounded strongly on Tuesday.
The South32 Ltd (ASX: S32) share price jumped an impressive 12%, the Rio Tinto Limited (ASX: RIO) share price was up 3.5%, and the Fortescue Metals Group Limited (ASX: FMG) share price surged a sizeable 6.5% higher.
