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• If you are wondering whether BHP Group at A$59.75 is still priced attractively after a strong run, the starting point is to understand what the current share price implies about its underlying value.
• The stock is up 30.6% year to date and 62.3% over the past year, although it has slipped 1.2% over the last week while still showing a 6.4% gain over the past month. These changes can affect how you think about both upside potential and downside risk.
• Recent coverage around BHP has focused on its position within global resources and how shifts in commodity demand and market sentiment are feeding into expectations for the stock. This context helps explain why shorter term price moves can look choppy, while the longer term chart shows a very different picture.
• Despite this share price performance, BHP currently records a valuation score of 1 out of 6. The next sections will break down what traditional valuation tools say about the stock and then finish with a broader way to think about value that goes beyond just the headline multiples.

BHP Group scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: BHP Group Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what a stock could be worth by projecting the cash the company might generate in the future and then discounting those cash flows back to today.

For BHP Group, the model used is a 2 Stage Free Cash Flow to Equity approach based on cash flow projections. The latest twelve month Free Cash Flow is about $10.33b. Analyst estimates and subsequent extrapolations point to projected Free Cash Flow of $11.36b in 2030, with a series of annual forecasts in between. Simply Wall St uses analyst inputs for the first years and then extends the trend to build a 10 year cash flow curve.

On this basis, the discounted projected cash flows result in an estimated intrinsic value of $40.75 per share. Compared with the current share price of A$59.75, the model suggests BHP is trading at a premium, with the DCF output indicating the stock is 46.6% overvalued on this measure.

Result: OVERVALUED

Our Discounted Cash Flow (DCF) analysis suggests BHP Group may be overvalued by 46.6%. Discover 10 high quality undervalued stocks or create your own screener to find better value opportunities.

BHP Discounted Cash Flow as at May 2026

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for BHP Group.

Approach 2: BHP Group Price vs Earnings

For profitable companies, the P/E ratio is a useful yardstick because it links what you pay for the stock directly to the earnings it currently generates. It is a quick way to see how much the market is paying for each dollar of profit.

What counts as a “normal” or “fair” P/E often reflects how the market views a company’s growth outlook and risk profile. Higher expected growth or lower perceived risk can justify a higher multiple, while slower growth or higher risk usually points to a lower one.

BHP Group currently trades on a P/E of 21.11x. That sits above the Metals and Mining industry average P/E of 12.76x, but below the peer group average of 31.36x. Simply Wall St also calculates a proprietary “Fair Ratio” of 19.40x, which is the P/E it would expect for BHP given factors such as its earnings characteristics, industry, profit margin, market cap and risk profile.

This Fair Ratio aims to be more tailored than a simple comparison against peers or the broad industry because it accounts for company specific features rather than just grouping everything together.

Comparing the Fair Ratio of 19.40x with the current P/E of 21.11x suggests the stock is trading a little above that fair level.

Result: OVERVALUED

ASX:BHP P/E Ratio as at May 2026

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Upgrade Your Decision Making: Choose your BHP Group Narrative

Earlier it was mentioned that there is an even better way to understand valuation. Narratives bring this to life by letting you attach a clear story about BHP Group to the numbers you care about, linking your view on its future revenue, earnings and margins to a forecast, a Fair Value and then a simple comparison with the current share price. All of this is available within an easy tool on Simply Wall St’s Community page that updates as new news or earnings arrive. The page already hosts very different perspectives, such as a lower fair value around A$31.79 that leans heavily on copper and project risks, and a higher fair value around A$121.48 that leans on scale, diversification and demand for critical commodities. This can help you see where your own view sits and how that might guide when you choose to act.

For BHP Group however we’ll make it really easy for you with previews of two leading BHP Group Narratives:

🐂 BHP Group Bull Case

Fair value: A$121.48 per share

Implied discount to this fair value: about 50.8% below the narrative fair value

Revenue growth assumption: 28%

• Frames BHP as a large scale producer of iron ore, copper and metallurgical coal tied into long term infrastructure, steel and energy transition demand.
• Highlights FY2024 revenue of about US$55.7b and underlying profit of US$13.7b, with iron ore around 50% of revenue and copper about 33%.
• Sees BHP’s low cost operations and strong cash generation as key strengths, while flagging exposure to commodity price cycles and Chinese iron ore demand as the main risks.

🐻 BHP Group Bear Case

Fair value: A$53.40 per share

Implied premium to this fair value: about 11.9% above the narrative fair value

Revenue growth assumption: 1.15%

• Sets out a view that BHP benefits from demand for critical minerals and steelmaking materials, supported by copper and potash projects and infrastructure spending in Asia and India.
• Notes analyst assumptions for modest revenue growth, higher profit margins over time and earnings of US$13.1b by about 2029, with a P/E of 19.1x applied to those earnings.
• Emphasizes risks around iron ore concentration, project execution, regulation, costs, and ESG pressures, and concludes that the current price sits close to the analyst consensus fair value.

If you find that your own expectations on growth, margins and risk line up with one of these narratives, that can help you decide whether today’s price feels stretched, conservative or somewhere in between, and whether BHP Group belongs on your watchlist or just on your radar for now.

Do you think there’s more to the story for BHP Group? Head over to our Community to see what others are saying!

ASX:BHP 1-Year Stock Price Chart

This article by Simply Wall St is general in nature. We provide commentary based on historical datan 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 yourn financial situation. We aim to bring you long-term focused analysis driven by fundamental data.n Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.n Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include BHP.AX.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com