BHP Group Limited

ASX:BHP Stock Report

Market Cap: AU$203.2b

BHP Group Valuation

Is BHP undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of BHP when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: BHP (A$40.07) is trading below our estimate of fair value (A$67.76)

Significantly Below Fair Value: BHP is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for BHP?

Key metric: As BHP is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for BHP. This is calculated by dividing BHP's market cap by their current earnings.
What is BHP's PE Ratio?
PE Ratio16.7x
EarningsUS$7.90b
Market CapUS$132.07b

Price to Earnings Ratio vs Peers

How does BHP's PE Ratio compare to its peers?

The above table shows the PE ratio for BHP vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average40.9x
LYC Lynas Rare Earths
75x43.5%AU$6.3b
MIN Mineral Resources
51.9x39.6%AU$6.5b
PLS Pilbara Minerals
28x25.8%AU$7.2b
ILU Iluka Resources
8.7x5.5%AU$2.4b
BHP BHP Group
16.7x5.5%AU$203.2b

Price-To-Earnings vs Peers: BHP is good value based on its Price-To-Earnings Ratio (16.7x) compared to the peer average (40.9x).

Price to Earnings Ratio vs Industry

How does BHP's PE Ratio compare vs other companies in the AU Metals and Mining Industry?

9 CompaniesPrice / EarningsEstimated GrowthMarket Cap
KCN Kingsgate Consolidated
1.8x-13.3%US$236.15m
GRR Grange Resources
2.8xn/aUS$191.76m
RHI Red Hill Minerals
1.7xn/aUS$170.84m
PTN Patronus Resources
2.3xn/aUS$64.90m
BHP 16.7xIndustry Avg. 12.0xNo. of Companies12PE01224364860+
9 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: BHP is expensive based on its Price-To-Earnings Ratio (16.7x) compared to the Australian Metals and Mining industry average (12x).

Price to Earnings Ratio vs Fair Ratio

What is BHP's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

BHP PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio16.7x
Fair PE Ratio22.5x

Price-To-Earnings vs Fair Ratio: BHP is good value based on its Price-To-Earnings Ratio (16.7x) compared to the estimated Fair Price-To-Earnings Ratio (22.5x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst BHP forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentAU$40.07
AU$46.07
+15.0%
7.0%AU$52.94AU$39.99n/a15
Nov ’25AU$42.78
AU$46.12
+7.8%
7.1%AU$52.32AU$39.52n/a15
Oct ’25AU$44.64
AU$45.81
+2.6%
8.3%AU$52.17AU$38.43n/a15
Sep ’25AU$40.77
AU$45.71
+12.1%
8.0%AU$52.86AU$40.03n/a16
Aug ’25AU$42.49
AU$47.43
+11.6%
8.3%AU$53.80AU$41.14n/a16
Jul ’25AU$43.30
AU$46.45
+7.3%
8.3%AU$52.72AU$39.90n/a15
Jun ’25AU$44.51
AU$46.61
+4.7%
8.8%AU$52.74AU$39.92n/a14
May ’25AU$42.32
AU$47.14
+11.4%
8.6%AU$53.02AU$40.62n/a12
Apr ’25AU$44.27
AU$47.17
+6.5%
7.5%AU$52.87AU$42.18n/a16
Mar ’25AU$44.92
AU$47.52
+5.8%
7.2%AU$52.96AU$42.42n/a16
Feb ’25AU$47.11
AU$48.35
+2.6%
9.1%AU$59.91AU$43.20n/a15
Jan ’25AU$50.41
AU$46.88
-7.0%
10.6%AU$56.34AU$38.79n/a15
Dec ’24AU$46.34
AU$46.03
-0.7%
11.1%AU$57.13AU$39.33n/a15
Nov ’24AU$45.19
AU$46.74
+3.4%
9.7%AU$59.09AU$40.66AU$42.7816
Oct ’24AU$44.25
AU$45.35
+2.5%
12.6%AU$58.78AU$36.28AU$44.6416
Sep ’24AU$44.74
AU$44.72
-0.05%
12.0%AU$58.30AU$35.98AU$40.7717
Aug ’24AU$46.37
AU$45.25
-2.4%
11.0%AU$56.23AU$36.82AU$42.4917
Jul ’24AU$44.99
AU$46.51
+3.4%
10.8%AU$57.21AU$37.46AU$43.3016
Jun ’24AU$42.07
AU$46.58
+10.7%
11.6%AU$57.45AU$37.64AU$44.5118
May ’24AU$44.18
AU$46.46
+5.2%
11.6%AU$56.97AU$38.35AU$42.3218
Apr ’24AU$47.23
AU$46.72
-1.1%
11.6%AU$56.60AU$35.87AU$44.2717
Mar ’24AU$46.22
AU$45.88
-0.7%
11.1%AU$55.97AU$36.64AU$44.9217
Feb ’24AU$49.55
AU$44.37
-10.4%
11.4%AU$57.55AU$37.69AU$47.1118
Jan ’24AU$45.63
AU$44.01
-3.6%
10.6%AU$54.90AU$33.64AU$50.4118
Dec ’23AU$46.48
AU$41.95
-9.7%
10.8%AU$54.16AU$33.19AU$46.3418
Nov ’23AU$38.42
AU$43.16
+12.3%
8.8%AU$51.72AU$35.83AU$45.1918

Analyst Forecast: Target price is less than 20% higher than the current share price.

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