Is BHP (ASX:BHP) Still Undervalued After Its Recent Share Price Gains?

BHP Group (ASX:BHP) has quietly climbed over the past month, adding to already strong past 3 months and one year gains, so it is worth asking whether the current price still offers value.

See our latest analysis for BHP Group.

That recent 30 day share price return of 3.56% builds on a solid year to date gain of 10.79%, while the 12 month total shareholder return of 14.44% signals steady, rather than explosive, momentum.

If BHP’s run has you thinking more broadly about cyclical opportunities, this could be a good moment to explore fast growing stocks with high insider ownership for other potential standouts.

With the shares now trading just below analyst targets and only a modest intrinsic discount implied, the key question becomes whether BHP is still undervalued or if the market has already priced in its future growth.

Most Popular Narrative Narrative: 1.5% Undervalued

With BHP last closing at A$44.27 against a narrative fair value of about A$44.94, the current setup implies only a slim upside on offer.

The revenue growth assumption has increased significantly from about 2.8 percent to roughly 21.7 percent, indicating a much stronger long term top line outlook. The net profit margin has eased slightly from around 21.63 percent to 21.58 percent, suggesting a nearly unchanged but fractionally lower profitability profile.

Read the complete narrative.

Curious how modest margin tweaks still justify a richer earnings multiple, even as top line expectations surge and a higher discount rate weighs on value? The full narrative unpacks the growth runway, profit profile, and future valuation multiple that need to align for this near fair value call to hold.

Result: Fair Value of $44.94 (UNDERVALUED)

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

However, persistent inflationary pressures and any sustained slowdown in Chinese steel demand could quickly undermine BHP’s margin expansion story and current valuation assumptions.

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

Build Your Own BHP Group Narrative

If you see the story differently or want to stress test the assumptions with your own lens, you can build a custom view in just a few minutes, starting with 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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