The BHP Group Ltd (ASX: BHP) share price has continued its ascent on Monday.
In morning trade, the mining giant's shares were up 2% to $48.43.
When the BHP share price reached that level, as you can see below, it had risen an impressive 28% in six months.
Image source: Getty Images
Why is the BHP share price pushing higher again?
Investors have been buying the Big Australian's shares on Monday for a couple of reasons.
The first is a strong session for ASX shares following an even stronger night of trade on Wall Street on Friday. Investors were flooding back into the market after wage inflation was softer than expected. This has sparked hopes that inflation could be easing and rates won't have to rise as much as feared.
In addition, investors have been buying ASX mining shares recently amid optimism over the reopening of China from the pandemic.
With Chinese economic growth slowing markedly, the market is betting on some major stimulus to support its recovery in 2023. This could lead to an uptick in demand for the commodities that BHP produces such as copper and iron ore, which could ultimately underpin strong commodity prices.
It is for the same reason that the Rio Tinto Ltd (ASX: RIO) share price has climbed along with BHP shares in recent months, as shown below.
Can BHP's shares keep rising?
As things stand, most brokers appear to believe the BHP share price is trading a little beyond fair value at the current level.
For example, Morgans, Morgan Stanley, and Goldman Sachs have the equivalent of hold ratings with price targets of $44.80, $42.55, and $42.90, respectively.
However, one broker that sees scope for BHP's shares to rise slightly from here is Macquarie. Its analysts currently have an outperform rating and $50.00 price target on them.
Based on the latest BHP share price, this implies potential upside of 3%. But if you add in the ~$2.88 per share fully franked dividend the broker is forecasting in FY 2023, the total return stretches to 9%.
Though, if commodity prices strengthen because of Chinese demand, it is possible that brokers will upgrade their earnings (and dividend) estimates and price targets accordingly. Time will tell if that is the case.
