CIMB upgrades BHP to Outperform from Neutral after conducting an in-depth study into structural costs increases across the world's mining sector. The survey provides two key take-aways for Australian investors: (1) new supply for most commodities is operating at relatively high costs and thus favouring existing producers (2) In Australia, production costs in coal and iron ore are set to surprise on the downside. The result for BHP, is a boost to the broker's valuation and price target for the company. CIMB's price target for BHP has been lifted to $43.10 from $39.40 (current price $35.49) with an expected return of 21%. Based on the company's last closing share price, the stock's estimated price-to-earnings ratio is 12.78.