RBC Capital, which made the call in a note to clients this morning, has downgraded the big miner to “underperform”, despite BHP (BHP) having had harder share-price falls in recent times than any other top four miners.

“We question the timing of the South32 spin off amidst potential structural change in oil and iron ore,” RBC analyst Chris Drew said.

Mr Drew said BHP was facing less diversification through its “four pillars” strategy, with two pillars coming under pressure from slumping iron ore and oil prices that are pummelling BHP’s financial strength and share price, and a larger dividend payout.

“We think this could be a case of ‘good idea, bad timing’ and question BHP’s financial flexibility in the coming two years,” he said.

“We like South32, so much so, that we think BHP should hold those assets, or at least consider other options such as letting South32 shoulder the debt burden, instead of letting South32 go debt-light.”

RBC’s downgrade, and a drop in target price from $37 to $30, was not based on commodity price reductions but a review of the portfolio.

“As we go through all the numbers on the different divisions for BHP, as well as the profit and loss, cash flow and balance sheet dynamics on both our forecasts and spot metrics, we regularly find that BHP comes up last or at the back of the pack on most metrics outside gearing and return on capital employed,” Mr Drew said.

“The main reasons for this are the big dividend commitment as well as the lack of flexibility on

capital expenditure for 2015-16.”

BHP’s shares, which are off 27 per cent since in the past four months, were down 40c to $28.06 in early trading.