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BHP Group Ltd
(Sydney:BHP)
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Rating:63Neutral
Price Target:
AU$64.00
▼(-5.04% Downside)
Action:Downgraded
Date:09/17/26
The score is primarily supported by solid financial health and cash generation with manageable leverage, but is capped by clear commodity-cycle volatility and normalized profitability versus peak conditions. Technical indicators are notably weak (below key moving averages with low RSI/Stochastic), which meaningfully drags the overall rating. Valuation is neutral-to-supportive due to the ~4% dividend, offset by a P/E near ~22 for a cyclical business.
Positive Factors
Strong profitability and cash generation
BHP combines high operating margins with substantial and improving free cash flow, providing funding for dividends, sustaining capital and growth projects. This cash-generative profile strengthens resilience and supports continued investment through the commodity cycle.
Negative Factors
Commodity-cycle earnings volatility
BHP's earnings remain highly sensitive to commodity prices, with profitability and revenue varying materially across the cycle. The sharp margin normalization from 2022 shows that current operating strength may not persist, making medium-term earnings less predictable.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong profitability and cash generation
BHP combines high operating margins with substantial and improving free cash flow, providing funding for dividends, sustaining capital and growth projects. This cash-generative profile strengthens resilience and supports continued investment through the commodity cycle.
Read all positive factors
BHP Group Ltd (BHP) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$302.47B
Dividend Yield4.13%
Average Volume (3M)7.80M
Price to Earnings (P/E)21.0
Beta (1Y)1.31
Revenue Growth9.21%
EPS Growth4.48%
CountryAU
Employees39,536
SectorBasic Materials
Sector Strength58
IndustryIndustrial Materials
Share Statistics
EPS (TTM)1.94
Shares Outstanding5,084,182,600
10 Day Avg. Volume7,635,468
30 Day Avg. Volume7,795,424
Financial Highlights & Ratios
PEG Ratio2.36
Price to Book (P/B)4.22
Price to Sales (P/S)3.55
P/FCF Ratio17.49
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
AU$61.20Price Target Upside-9.20% Downside
Rating ConsensusHold
Number of Analyst Covering16
EPS Forecast (FY)2.49
Revenue Forecast (FY)AU$58.20B
BHP Group Ltd Business Overview & Revenue Model
Company Description
BHP Group Limited operates as a leading global natural resources enterprise, with extensive operations across Australia, Europe, Asia (including China, Japan, India, and South Korea), North and South America, and other international regions. The c...
How the Company Makes Money
BHP primarily makes money by extracting and selling commodities to customers under a mix of longer-term contracts and spot/market-linked pricing, depending on the product and region. Key revenue streams include: (1) Iron ore: Sales of iron ore use...
BHP Group Ltd Earnings Call Summary
Earnings Call Date:Feb 16, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Feb 15, 2027
Earnings Call Sentiment Positive
The call is predominantly positive: management reported record operational and financial results (EBITDA +25%, strong margins), raised copper guidance, delivered operational records and improved unit costs, announced significant cash-generating transactions and increased shareholder returns (interim dividend +46% half-on-half). Notable execution risks and cost/capex considerations were disclosed — primarily a Jansen Stage 1 cost update ($8.4bn), a 10% grade decline at Escondida, geotechnical issues in an underground coal mine, and project permitting/timing uncertainty — but these issues are relatively limited compared with the breadth and scale of positive results and optionality presented.Positive Updates
Strong Financial Performance
Underlying EBITDA grew 25% with an increased margin of 58%; underlying attributable profit was $6.2 billion; return on capital employed (ROCE) rose to 24% year-on-year.
Negative Updates
Escondida Grade Decline
Escondida experienced a 10% lower grade in the period—an operational challenge that required throughput and recovery improvements to maintain volumes (although costs improved 16%).
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Financial Performance
Underlying EBITDA grew 25% with an increased margin of 58%; underlying attributable profit was $6.2 billion; return on capital employed (ROCE) rose to 24% year-on-year.
Read all positive updates
Company Guidance
Management's guidance emphasized continued cash generation, disciplined returns and material copper and iron growth: underlying EBITDA rose 25% (58% margin), underlying attributable profit was $6.2bn and ROCE 24%, supporting an interim dividend of US$0.73/share (up 46% H/H) and a $3.7bn half‑year payout (60% payout ratio); they expect ~US$60bn of attributable free cash flow over the next five years (c.US$10bn in an extreme low‑price stress), see up to US$10bn of capital that could be unlocked (over US$6bn already announced — US$4.3bn for Antamina, US$2bn WAIO power), raised copper guidance (Escondida +150kt cumulative over two years, FY27 guidance 1.0–1.1Mt, >500kt extra over next five years = ~US$5bn EBITDA), target ~2.5Mt Cu‑eq p.a. by the mid‑2030s with ~3–4% CAGR to 2035 (around 40% production growth by 2035), plan iron ore volumes >305Mtpa by end FY28 (option to 330Mtpa) and costs <US$17.50/t (WAIO C1 US$17.66/t), updated Stage 1 cost to US$8.4bn with first production mid‑2027 (Jansen expected ~US$1bn EBITDA per stage, >60% margins), while group production was +2% and unit costs improved ~4.5% this half; safety metrics improved and there were no fatalities.BHP Group Ltd Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
77
Positive
Cash Flow
72
Positive
| Breakdown | Jun 2026 | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 58.76B | 51.26B | 56.03B | 53.82B | 65.10B |
| Gross Profit | 44.41B | 36.73B | 46.10B | 42.87B | 50.18B |
| EBITDA | 30.74B | 25.77B | 23.52B | 28.61B | 39.96B |
| Net Income | 9.83B | 9.02B | 7.90B | 12.92B | 30.90B |
Balance Sheet | |||||
| Total Assets | 121.39B | 108.79B | 102.36B | 101.30B | 95.17B |
| Cash, Cash Equivalents and Short-Term Investments | 18.60B | 12.04B | 12.65B | 12.46B | 17.54B |
| Total Debt | 26.23B | 24.46B | 20.18B | 24.10B | 16.79B |
| Total Liabilities | 65.07B | 56.57B | 53.24B | 52.77B | 46.40B |
| Stockholders Equity | 49.42B | 46.23B | 44.81B | 44.50B | 44.96B |
Cash Flow | |||||
| Free Cash Flow | 11.93B | 9.29B | 11.85B | 11.62B | 26.06B |
| Operating Cash Flow | 21.78B | 18.69B | 20.66B | 18.70B | 32.17B |
| Investing Cash Flow | -12.01B | -13.35B | -8.76B | -13.06B | -6.96B |
| Financing Cash Flow | -3.28B | -5.97B | -11.67B | -10.31B | -22.77B |
BHP Group Ltd Technical Analysis
Negative
67.40
Price Trends
61.73
Negative
60.27
Negative
56.10
Positive
Market Momentum
-0.76
Positive
37.24
Neutral
15.89
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:BHP, the sentiment is Negative. The current price of 67.4 is above the 20-day moving average (MA) of 60.55, above the 50-day MA of 61.73, and above the 200-day MA of 56.10, indicating a neutral trend. The MACD of -0.76 indicates Positive momentum. The RSI at 37.24 is Neutral, neither overbought nor oversold. The STOCH value of 15.89 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AU:BHP.
BHP Group Ltd Risk Analysis
BHP Group Ltd disclosed 8 risk factors in its most recent earnings report. BHP Group Ltd reported the most risks in the "Macro & Political" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
BHP Group Ltd Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | AU$19.68B | 12.68 | 11.30% | 3.02% | -3.88% | 312.74% | |
68 Neutral | AU$211.60B | 11.69 | 18.86% | 4.35% | 9.79% | 12.27% | |
67 Neutral | AU$46.96B | 11.31 | 13.99% | 7.08% | 4.18% | -18.00% | |
63 Neutral | AU$302.47B | 21.00 | 19.41% | 4.13% | 9.21% | 4.48% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
61 Neutral | AU$4.02B | 26.94 | 6.76% | 0.95% | -11.58% | ― | |
58 Neutral | AU$8.94B | 8.25 | 26.29% | 1.83% | 44.48% | ― |
* Basic Materials Sector Average
AU:BHP
BHP Group Ltd
57.13
16.17
39.48%
AU:S32
South32
4.36
1.29
41.83%
AU:FMG
Fortescue Metals Group Ltd
14.57
-5.13
-26.05%
AU:IGO
IGO
5.15
-0.21
-3.86%
AU:MIN
Mineral Resources Limited
44.25
2.61
6.26%
AU:RIO
Rio Tinto Limited
150.30
26.32
21.23%
BHP Group Ltd Corporate Events
BHP Holds Guidance as Copper Output Dips but Growth Projects Advance
Oct 19, 2026
BHP reported a mixed operational quarter to 30 September 2026, with copper output down 19% due to planned grade declines, maintenance, severe weather in Chile and a conveyor failure in South Australia, while bulk commodities posted a strong start ...
BHP Reports Lapse of 283,792 Performance Rights in Capital Update
Oct 14, 2026
BHP Group Limited has reported the lapse of 283,792 performance rights under its BHPAC securities, following a failure to meet the specified conditions attached to those rights. The cessation, dated 30 September 2026, reflects changes in the compa...
BHP Issues 2.2 Million Shares on Conversion of Unquoted Securities
Oct 13, 2026
BHP Group Limited, a leading global mining and metals producer, is listed on the Australian Securities Exchange under the code BHP. The company supplies major commodities including iron ore, copper and coal to industrial customers worldwide, makin...
BHP Issues Over 2.5 Million Unquoted Performance Rights Under Incentive Plan
Oct 12, 2026
BHP Group Ltd has notified the market of the issue of 2,582,521 unquoted performance rights under its employee incentive scheme, effective 30 September 2026. These securities, identified under the ASX code BHPAC, are not intended to be quoted on t...
BHP Reaffirms Commitment to Western Australia Iron Ore Amid Partnership Talk
Sep 4, 2026
BHP has responded to recent media speculation about a potential partnership involving part of its Western Australia Iron Ore operations. The company said it routinely assesses partnership options that could deliver long-term shareholder value, ref...
BHP Updates Interim Dividend Details to Include JSE Currency Conversion
Aug 28, 2026
BHP Group Limited has updated its previously announced interim dividend notification for its ordinary fully paid shares for the six-month period ended 30 June 2026. The company has confirmed that the update, dated 28 August 2026, relates specifica...
BHP Highlights Economic and ESG Impact in 2026 Reporting Suite
Aug 17, 2026
BHP Group Ltd is a global resources producer with a diversified portfolio spanning copper, potash, coal and iron ore. Its operations serve industrial, energy and agricultural markets, reinforcing its position as a major mining and commodities grou...
BHP boosts earnings and dividends as copper-led growth reshapes portfolio
Aug 17, 2026
BHP reported a strong FY26, delivering record iron ore production at its Western Australia Iron Ore operations and around 2 million tonnes of copper for a second consecutive year, cementing its status as the world’s largest copper producer. ...
BHP Declares USD 0.99 Interim Dividend for Half‑Year to June 2026
Aug 17, 2026
BHP Group Ltd has declared a dividend of USD 0.99 per ordinary fully paid share, relating to the six‑month period ended 30 June 2026. The distribution schedule sets an ex‑dividend date of 3 September 2026 and a record date of 4 Septemb...
BHP boosts profit, dividends as asset backing strengthens in FY2026
Aug 17, 2026
BHP Group Limited reported a strong financial performance for the year ended 30 June 2026, with revenue rising 15% to US$58.76 billion and profit after tax attributable to shareholders increasing 9% to US$9.83 billion. Net tangible assets per full...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.