Update shared on17 Sep 2025
Fair value Decreased 1.27%BHP Group's consensus price target was trimmed to A$42.33 as analysts cite valuation concerns amid reduced free cash flow yields, persistent cost pressures, and project execution risks, with the revision reflecting a more cautious outlook despite recent strong results.
Analyst Commentary
- Mixed analyst sentiment with several downgrades to Neutral/Market Perform, citing valuation concerns after the recent share rally and reduced free cash flow yields.
- Persistent inflationary pressures and costs remain above pre-pandemic levels, though normalization is noted in most areas.
- Execution risk highlighted due to cost overruns at the Jansen Stage 1 project, raising concerns about future capital discipline.
- Bullish analysts see solid recent financial results, including strong dividends, but question the sustainability of these surprises into FY26.
- Price target revisions broadly reflect a cautious outlook amid cost headwinds and project-specific challenges, with some upside scenarios pointing to continued operational strength.
What's in the News
- BHP is leading a consortium, including major Asian steelmakers and partners like Chevron and Mitsui, to investigate carbon capture utilization and storage (CCUS) opportunities in China (Bloomberg).
- BHP and Vale offered approximately $1.4B to settle a UK class action lawsuit stemming from the 2015 Mariana dam disaster, with $800M in victim compensation and $600M for legal fees, though claimants’ lawyers are seeking about $3B (Financial Times).
- The law firm Pogust Goodhead has filed a $1.7B lawsuit in London against BHP and Vale, alleging they attempted to sidestep legal fees by arranging settlements related to the Brazilian dam collapse case (Reuters).
- Former BHP Chair Ken MacKenzie is under consideration for the chairman position at BP alongside former Centrica CEO Sam Laidlaw (Sky News).
Valuation Changes
Summary of Valuation Changes for BHP Group
- The Consensus Analyst Price Target remained effectively unchanged, moving only marginally from A$42.87 to A$42.33.
- The Future P/E for BHP Group has significantly risen from 17.57x to 25.87x.
- The Consensus Revenue Growth forecasts for BHP Group has significantly risen from -1.1% per annum to -0.9% per annum.
Disclaimer
AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.