Update shared on 16 Nov 2025
Fair value Increased 1.79%BHP Group’s analyst fair value target has increased modestly from $43.95 to $44.73. Analysts are factoring in revised financial assumptions and recent price target adjustments, despite mixed short-term sentiment.
Analyst Commentary
Recent research updates on BHP Group reflect a blend of caution and optimism, as analysts assess the company’s performance, valuation, and growth prospects in light of updated price targets and changing market sentiment.
Bullish Takeaways
- Bullish analysts have raised price targets in response to improving fundamentals and positive financial revisions. This indicates potential for moderate upside.
- The company's robust FY25 financial results and unexpected dividend have demonstrated resilient execution and healthy capital returns. These factors support valuation stability.
- Adjustments in cost structures and normalization of inflationary pressures point to effective management and potential margin stabilization. This contributes to confidence in the company’s growth trajectory.
Bearish Takeaways
- Some analysts have lowered price targets or adopted more cautious ratings, citing concerns around the sustainability of recent dividend surprises and whether outperformance can continue into FY26.
- While inflation impacts have largely eased, persistent cost pressures in certain areas continue to challenge overall profitability and may weigh on near-term execution.
- Mixed short-term sentiment reflects uncertainty in commodity pricing and external market conditions. This suggests that valuation improvements may be gradual and contingent on future performance.
What's in the News
- BHP has been found legally liable for the 2015 Mariana dam disaster by the High Court in London. Future stages will determine damages. The company intends to appeal and highlights its significant remediation and compensation efforts in Brazil. (Financial Times, company statement)
- The U.S. Department of the Interior has added copper, silver, and metallurgical coal to its "critical minerals" list, which could impact BHP’s operations and future U.S. trade policy. (Financial Times)
- BHP sold several iron ore cargoes to Chinese traders despite an ongoing dispute with China’s state buyer, offering shipments at a discount. (Bloomberg)
- BHP is considering reopening inactive mines in the historic U.S. copper belt following policy changes that have increased extraction industry activity. (Financial Times)
- China’s state iron ore buyer has temporarily banned the purchase of BHP’s dollar-denominated iron ore shipments amid an ongoing pricing dispute. (Bloomberg)
Valuation Changes
- Consensus Analyst Fair Value Target has risen slightly, from A$43.95 to A$44.73.
- Discount Rate has increased from 7.47% to 7.95%.
- Revenue Growth projection has improved modestly, shifting from -0.11% to -0.11% (less negative).
- Net Profit Margin estimate has edged up, changing from 21.77% to 21.90%.
- Future P/E Ratio expectation has increased marginally, moving from 16.32x to 16.71x.
Disclaimer
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