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BHP Group Ltd
(Sydney:BHP)
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Rating:75Outperform
Price Target:
AU$72.00
▲(6.82% Upside)
Action:Reiterated
Date:08/20/26
The score is driven by solid financial performance (strong profitability, healthy cash generation, manageable leverage) and constructive technical momentum (price above key moving averages with positive MACD). The earnings call adds support through upbeat guidance and capital/return actions, while valuation is the main dampener given a ~22.7 P/E for a cyclical business despite a ~3% dividend yield.
Positive Factors
High margins & ROCE
Sustained high margins and a 24% ROCE indicate the business converts revenue into profit efficiently across cycles. Durable margin strength supports large dividend payouts, reinvestment and buffer against commodity swings, underpinning long-term cash returns and capital allocation flexibility.
Negative Factors
Large project capital & execution risk
Very large upfront capex for Jansen raises execution and funding risk over multiple years. Cost escalation or delivery delays would compress long-term returns and divert cash from dividends or other growth options, making project execution a material structural risk.
Read all positive and negative factors
Positive Factors
Negative Factors
High margins & ROCE
Sustained high margins and a 24% ROCE indicate the business converts revenue into profit efficiently across cycles. Durable margin strength supports large dividend payouts, reinvestment and buffer against commodity swings, underpinning long-term cash returns and capital allocation flexibility.
Read all positive factors
BHP Group Ltd (BHP) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$339.78B
Dividend Yield3.57%
Average Volume (3M)7.25M
Price to Earnings (P/E)23.5
Beta (1Y)1.33
Revenue Growth9.21%
EPS Growth4.48%
CountryAU
Employees39,536
SectorBasic Materials
Sector Strength58
IndustryIndustrial Materials
Share Statistics
EPS (TTM)1.95
Shares Outstanding5,084,182,600
10 Day Avg. Volume8,779,989
30 Day Avg. Volume7,251,712
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$59.18Price Target Upside-12.19% Downside
Rating ConsensusHold
Number of Analyst Covering15
EPS Forecast (FY)2.5
Revenue Forecast (FY)AU$57.39B
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 23, 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 Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | AU$339.78B | 23.49 | 19.49% | 3.26% | 9.21% | 4.48% | |
68 Neutral | AU$23.45B | 15.52 | 11.30% | 2.67% | -3.88% | 312.74% | |
68 Neutral | AU$245.95B | 13.75 | 18.86% | 3.56% | 9.79% | 12.27% | |
67 Neutral | AU$53.58B | 13.04 | 14.10% | 6.58% | 4.18% | -18.00% | |
66 Neutral | AU$12.81B | 11.53 | 26.29% | ― | 44.48% | ― | |
65 Neutral | AU$6.46B | 44.59 | 6.76% | ― | -11.58% | ― | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% |
* Basic Materials Sector Average
AU:BHP
BHP Group Ltd
64.65
23.46
56.94%
AU:S32
South32
5.15
2.60
101.64%
AU:FMG
Fortescue Metals Group Ltd
16.61
-1.03
-5.85%
AU:IGO
IGO
8.32
3.55
74.42%
AU:MIN
Mineral Resources Limited
62.14
25.35
68.90%
AU:RIO
Rio Tinto Limited
174.88
64.02
57.76%
BHP Group Ltd Corporate Events
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...
BHP Reports Lapse of 136,576 Unvested Performance Rights
Jul 10, 2026
BHP Group Limited has notified the market of the cessation of 136,576 performance rights, identified under ASX security code BHPAC. The lapse occurred on June 30, 2026, because the conditional rights did not meet, or could no longer meet, the requ...
BHP Issues 20,436 New Ordinary Shares Following Conversion of Unquoted Securities
Jul 9, 2026
BHP Group Limited has notified the market of the issue of 20,436 new ordinary fully paid shares, arising from the conversion or exercise of previously unquoted securities. The shares were issued on June 30, 2026, reflecting routine equity administ...
BHP Issues 277,431 Unquoted Performance Rights Under Employee Incentive Scheme
Jul 7, 2026
BHP Group Ltd, a leading global mining and resources company listed on the ASX, produces and markets major commodities such as iron ore and copper for industrial and infrastructure customers worldwide. Its diversified portfolio and scale make it a...
BHP reshapes executive leadership team ahead of new CEO transition
Jun 26, 2026
BHP Group has announced an update to its executive leadership team effective 1 September 2026, as incoming CEO Brandon Craig prepares to take the helm. The refreshed line-up includes key roles spanning enterprise performance, legal and governance,...
BHP Reshapes Executive Team and Regional Leadership Ahead of New CEO
Jun 25, 2026
BHP has announced a series of executive leadership changes as Brandon Craig prepares to assume the role of Chief Executive Officer and join the board on 1 July 2026. The company is restructuring its regional leadership by splitting the President A...
BHP lifts Jansen Stage 2 potash budget to US$6.9bn and flags US$2.3bn impairment
Jun 18, 2026
BHP has revised the total investment estimate for Stage 2 of its Jansen potash project in Canada from US$4.9 billion to US$6.9 billion, with first production now targeted for late fiscal 2031 after a two-year schedule extension. The cost increase ...
BHP Appoints Mark Vassella as Independent Non-Executive Director
Jun 1, 2026
BHP Group Limited has appointed Mark Vassella as an independent non-executive director effective 1 June 2026, expanding the board with an experienced external member. The company disclosed his initial interests in BHP securities, including 1,905 o...
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.