BHP (ASX:BHP) Valuation Spotlight After Major Mt Arthur Land Transfer and Mine Closure Progress

BHP Group (ASX:BHP) is transferring about 3,700 hectares from its Mt Arthur Coal operation to Malabar Resources. This move is related to the company’s plan to responsibly close the mine by 2030.

See our latest analysis for BHP Group.

At A$43.0 per share, BHP Group has seen steady momentum this year, supported by decisive actions such as the Mt Arthur Coal land transfer and a continued focus on long-term sustainability. The stock’s 7.6% year-to-date share price return signals optimism. Meanwhile, a 4.3% total shareholder return over the past year suggests that, despite some market swings, investors continue to see lasting value in BHP’s broader transition efforts.

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With BHP shares trading just below analyst price targets and long-term returns looking solid, the big question is whether recent momentum leaves room for upside or if the market already reflects BHP’s future growth prospects.

Most Popular Narrative: 2.2% Undervalued

BHP Group’s fair value estimate puts shares slightly ahead of their latest close, driven by future profits and cautious margin expectations. The narrative behind the valuation is anchored in the company’s strengths and global opportunities.

"A strong pipeline of copper and potash projects positions BHP to benefit from a global surge in decarbonization efforts and electrification initiatives, with rising demand for critical minerals expected to drive higher future revenues. Increasing infrastructure development and ongoing urbanization in Asia and India are set to underpin robust demand for steelmaking materials, supporting stable or growing iron ore volumes and revenue."

Read the complete narrative.

Want to uncover what sets this valuation apart? There is a key set of financial forecasts spanning profit margins, earnings upgrades, and market multiples that are not visible in the headline numbers. Discover the exact trends and bold projections shaping the narrative’s outlook.

Result: Fair Value of $43.95 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent inflation and a slowdown in Chinese demand could challenge BHP’s profit margins and test the strength of its current growth narrative.

Find out about the key risks to this BHP Group narrative.

Build Your Own BHP Group Narrative

If you’re not convinced by this narrative or prefer hands-on analysis, you can easily piece together your own view in just minutes. Do it your way

A great starting point for your BHP Group research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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