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BHP Group Plc (BHP)
NYSE:BHP
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BHP Group
(NYSE:BHP)
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Rating:74Outperform
Price Target:
$73.00
▲(11.81% Upside)
Action:ReiteratedDate:02/18/26
Overall score is driven by solid financial strength and profitability with a healthy balance sheet, complemented by strong bullish price trends and positive momentum. The main offsets are softer fundamentals (negative revenue growth and slowing free-cash-flow growth) and a valuation that appears only moderate rather than clearly discounted.
Positive Factors
Diversified commodity portfolio
BHP's broad, large-scale exposure to iron ore, copper and coking coal provides durable cash generation across multiple commodity cycles. This portfolio mix supports long-term demand from steelmaking and energy sectors, reducing reliance on any single commodity or market.
Robust balance sheet and profitability
Consistently solid EBIT/EBITDA and net margins coupled with a moderate debt-to-equity profile give BHP financial flexibility to fund capex, weather commodity cycles and return capital. Healthy ROE signals effective capital allocation over time.
Internal CEO succession supports continuity
Promoting an internal executive with regional leadership experience suggests strategic continuity and preserves institutional knowledge. This reduces execution risk on long-term projects and maintains focus on BHP's growth pipeline and shareholder-return priorities.
Negative Factors
Weak revenue growth trend
Sustained weak or negative revenue growth erodes operating leverage and constrains long-term earnings expansion. For a commodity producer, prolonged top-line pressure can signal structural demand shifts or loss of pricing/volume advantage versus peers.
Declining free-cash-flow growth
Falling FCF growth reduces capacity to self-fund large projects, dividends, or buybacks without raising leverage. Over time this can limit strategic optionality and make the business more vulnerable in lower-price environments.
Margin pressure / falling gross profit margin
Eroding gross margins indicate rising unit costs or lower price realizations. If persistent, margin compression will impair operating cash flow and returns on invested capital, challenging BHP's ability to sustain capital-intensive growth and shareholder distributions.
BHP Group (BHP) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$169.80B
Dividend Yield3.55%
Average Volume (3M)4.28M
Price to Earnings (P/E)6.8
Beta (1Y)0.97
Revenue Growth-7.86%
EPS Growth14.17%
CountryUS
Employees38,962
SectorBasic Materials
Sector Strength58
IndustryIndustrial Materials
Share Statistics
EPS (TTM)2.44
Shares Outstanding2,539,456,500
10 Day Avg. Volume4,284,338
30 Day Avg. Volume4,276,021
Financial Highlights & Ratios
PEG Ratio0.96
Price to Book (P/B)2.56
Price to Sales (P/S)2.38
P/FCF Ratio13.15
Enterprise Value/Market Cap1.10
Enterprise Value/Revenue3.47
Enterprise Value/Gross Profit4.18
Enterprise Value/Ebitda6.96
Forecast
1Y Price Target
$68.33Price Target Upside4.66% Upside
Rating ConsensusHold
Number of Analyst Covering3
EPS Forecast (FY)5.16
Revenue Forecast (FY)$56.54B
BHP Group Business Overview & Revenue Model
Company DescriptionBHP Group Limited operates as a resources company in Australia, Europe, China, Japan, India, South Korea, the rest of Asia, North America, South America, and internationally. The company operates through Copper, Iron Ore, and Coal segments. It engages in the mining of copper, uranium, gold, zinc, lead, molybdenum, silver, iron ore, cobalt, and metallurgical and energy coal. The company is also involved in the mining, smelting, and refining of nickel, as well as potash development activities. In addition, it provides towing, freight, marketing and trading, marketing support, finance, administrative, and other services. The company was founded in 1851 and is headquartered in Melbourne, Australia.
How the Company Makes MoneyBHP makes money primarily by producing and selling commodities into global markets under contracts and spot pricing arrangements. Its main revenue streams come from: (1) Iron ore: mining, processing, and shipping iron ore to steel producers and commodity traders, with realized revenue driven by benchmark iron ore prices, ore grade/quality differentials, and shipment volumes. (2) Copper: producing copper (and associated by-products where applicable) and selling it to smelters, refiners, manufacturers, and traders; earnings depend on copper prices, production volumes, treatment/refining terms where relevant, and operating costs. (3) Metallurgical (coking) coal: extracting and selling coal used in steelmaking, with revenue linked to seaborne met coal benchmark prices and export volumes. BHP’s earnings are heavily influenced by global commodity price cycles, production volumes, unit operating costs, foreign exchange movements (notably AUD/USD and other local currencies against the USD), and logistics performance (rail, ports, shipping). The company also generates cash flow through marketing and distribution of its products (selling to a diversified customer base and optimizing logistics and timing), and it may record additional income from asset sales, joint arrangements, or other non-core items; specific contributions from such items vary by period and are not quantified here.
BHP Group Key Performance Indicators (KPIs)
Any
Copper Production (kt)
Reflects the output of copper in kilotonnes, a key indicator of BHP's contribution to the electronics and renewable energy industries, and its exposure to market demand for these essential materials.
Reflects the output of copper in kilotonnes, a key indicator of BHP's contribution to the electronics and renewable energy industries, and its exposure to market demand for these essential materials.
Data provided by:
The Fly
The FlyBHP Group Earnings Call Summary
Earnings Call Date:Aug 18, 2025
(Q4-2025)
| % Change Since: |
Next Earnings Date:Aug 25, 2026
Earnings Call Sentiment Positive
BHP delivered strong operational and financial performance with record production in key segments, robust safety achievements, and significant shareholder returns. However, challenges include a decline in EBITDA due to commodity prices, cost overruns, and delays in decarbonization technology development.Q4-2025 Updates
Positive Updates
Record Iron Ore and Copper Production
BHP achieved record production in iron ore and copper, with copper volumes growing by 28% over the past 3 years and producing more than 2 million tonnes.
Strong Financial Performance and Dividend
The company maintained a healthy underlying EBITDA margin of 53% and declared a final dividend of USD 0.60 per share, bringing the full-year dividend to $5.6 billion.
Safety and Gender Balance Achievements
BHP realized year-on-year improvements in safety metrics with no fatalities and achieved gender balance with 41.3% female representation in the workforce.
Western Australia Iron Ore Performance
Record production and shipments, an EBITDA margin of 63%, and C1 costs of $17.29 per tonne, making it the lowest cost major iron ore producer globally for 6 years.
Copper Segment Success
Generated a record $12 billion in EBITDA, 45% of the group total, with Escondida volumes increasing by 16%.
Negative Updates
EBITDA Decline Due to Commodity Prices
A 10% decline in EBITDA was attributed wholly to unfavorable commodity prices despite favorable foreign exchange rates.
Cost and Schedule Overruns at Jansen
Higher inflation and cost escalation, coupled with lower productivity, led to increased costs and delayed schedules for the Jansen project.
Decarbonization Technology Delays
The pace of development for decarbonization technology has slowed, particularly regarding diesel displacement, affecting operational decarbonization timelines.
Company Guidance
In the call discussing BHP's financial performance for fiscal year 2025, several key metrics and strategic decisions were highlighted. BHP achieved record iron ore and copper production, with copper volumes growing by 28% over the past three years to surpass 2 million tonnes. The company reported an underlying EBITDA margin of 53% and a return on capital employed of 21%. A final dividend of USD 0.60 per share was announced, contributing to a full-year dividend of $5.6 billion, representing a payout ratio of 60%. BHP also communicated a reduction in capital spend by $1 billion per year over the medium term and revised its target net debt range to $10 billion to $20 billion. Operational excellence was emphasized, with unit costs at major assets improving by nearly 5% year-on-year despite inflationary pressures. Notably, Western Australia iron ore achieved a record EBITDA margin of 63% with C1 costs of $17.29 per tonne, remaining the lowest-cost major iron ore producer globally for six years. The company also highlighted safety improvements, achieving a 63% reduction in high potential injury frequency over five years. Looking forward, BHP outlined plans for average production growth of 2.2% per annum over the next decade, with significant contributions expected from copper and potash projects.BHP Group Financial Statement Overview
Summary
Strong profitability and operating efficiency (solid EBIT/EBITDA and net margins) with a robust balance sheet (manageable leverage, healthy ROE). Offsetting factors include negative recent revenue growth and weakening gross margin, plus declining free-cash-flow growth despite solid cash conversion.Income Statement
BHP Group's income statement shows a strong EBIT and EBITDA margin, indicating efficient operations. However, the revenue growth rate has been negative in recent years, which is a concern. The gross profit margin has decreased, reflecting potential cost pressures. Despite these challenges, the company maintains a solid net profit margin.75
Positive
Balance Sheet
The balance sheet is robust with a moderate debt-to-equity ratio, suggesting manageable leverage. Return on equity is healthy, indicating effective use of shareholder funds. The equity ratio is stable, reflecting a strong asset base relative to equity.80
Positive
Cash Flow
Cash flow analysis reveals a decline in free cash flow growth, which could impact future investments. However, the operating cash flow to net income ratio remains strong, indicating good cash generation relative to earnings. The free cash flow to net income ratio is moderate, suggesting room for improvement.70
Positive
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 54.04B | 51.26B | 55.66B | 53.82B | 65.10B | 57.26B |
| Gross Profit | 44.88B | 42.14B | 45.73B | 42.87B | 55.76B | 49.51B |
| EBITDA | 26.91B | 23.44B | 26.84B | 25.58B | 37.28B | 33.29B |
| Net Income | 10.25B | 9.02B | 7.90B | 12.92B | 30.90B | 11.30B |
Balance Sheet | ||||||
| Total Assets | 116.01B | 108.79B | 102.36B | 101.30B | 95.17B | 108.93B |
| Cash, Cash Equivalents and Short-Term Investments | 13.81B | 12.17B | 12.65B | 12.46B | 17.54B | 15.25B |
| Total Debt | 31.53B | 24.50B | 20.18B | 22.34B | 16.43B | 20.98B |
| Total Liabilities | 60.55B | 56.57B | 53.24B | 52.77B | 46.40B | 53.32B |
| Stockholders Equity | 50.41B | 47.66B | 44.81B | 44.50B | 44.96B | 51.26B |
Cash Flow | ||||||
| Free Cash Flow | 10.30B | 9.28B | 11.85B | 11.62B | 26.06B | 21.43B |
| Operating Cash Flow | 19.77B | 18.66B | 20.66B | 18.70B | 32.17B | 27.23B |
| Investing Cash Flow | -14.16B | -13.33B | -8.76B | -13.06B | -6.96B | -7.84B |
| Financing Cash Flow | -2.16B | -5.96B | -11.67B | -10.31B | -22.77B | -17.92B |
BHP Group Technical Analysis
Neutral
65.29
Price Trends
70.34
Negative
63.48
Positive
57.31
Positive
Market Momentum
-1.13
Positive
34.28
Neutral
11.02
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BHP, the sentiment is Neutral. The current price of 65.29 is below the 20-day moving average (MA) of 73.83, below the 50-day MA of 70.34, and above the 200-day MA of 57.31, indicating a neutral trend. The MACD of -1.13 indicates Positive momentum. The RSI at 34.28 is Neutral, neither overbought nor oversold. The STOCH value of 11.02 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for BHP.
BHP Group Risk Analysis
BHP Group disclosed 8 risk factors in its most recent earnings report. BHP Group 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 Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $169.80B | 6.78 | 21.41% | 3.55% | -7.86% | 14.17% | |
69 Neutral | $143.04B | 13.01 | 16.59% | 4.60% | -0.44% | -4.20% | |
68 Neutral | $60.70B | 22.50 | 6.34% | 10.04% | -8.49% | -41.69% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
58 Neutral | $1.22B | 8.84 | 14.19% | 1.14% | 7.92% | 91.83% | |
57 Neutral | $900.06M | 11.11 | -15.33% | ― | 11.32% | 61.60% | |
54 Neutral | $8.99B | -100.09 | -5.04% | ― | 26.44% | -95.87% |
* Basic Materials Sector Average
BHP
BHP Group
65.29
17.96
37.96%
CMP
Compass Minerals International
21.50
11.86
123.03%
RIO
Rio Tinto
83.15
24.09
40.78%
VALE
Vale SA
14.05
4.83
52.44%
NEXA
Nexa Resources SA
9.19
3.55
62.91%
MP
MP Materials
50.60
24.14
91.23%
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.