Morningstar views8 May 2026 20:12
Found this on Morningstar
Our Discounted Cash Flow (DCF) analysis suggests BHP Group may be overvalued by 44.1%. Discover 10 high quality undervalued stocks or create your own screener to find better value opportunities.
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 a profitable company like BHP Group, the P/E ratio is a straightforward way to see how much you are paying for each dollar of earnings. It captures what the market is currently willing to pay given expectations for future earnings and the perceived risk of those earnings.
Higher growth expectations or lower perceived risk usually support a higher P/E, while lower growth or higher risk tend to justify a lower P/E. BHP Group currently trades on a P/E of 20.76x. That sits above the Metals and Mining industry average of 12.81x, yet below the peer group average of 30.48x. This suggests the stock is priced higher than the broad industry, but not as highly as some peers.
Simply Wall St calculates a proprietary “Fair Ratio” for BHP Group of 19.41x. This is designed to reflect the P/E that might be expected given factors such as earnings growth, profit margin, industry, market cap and company specific risks. Because it blends these inputs, the Fair Ratio can be more tailored than a simple comparison against peers or an industry average.
Comparing the current P/E of 20.76x with the Fair Ratio of 19.41x suggests the stock is trading above this tailored reference point.
Result: OVERVALUED
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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 think about valuation. Narratives on Simply Wall St’s Community page give you a simple way to set out your own story for BHP Group, link that story to explicit assumptions for future revenue, earnings and margins, and arrive at a Fair Value you can compare with the current price. These Narratives update automatically as new news or earnings arrive, and different investors can express very different views, such as one Narrative that sees Fair Value around A$31.79 based on more cautious growth and another that sees Fair Value around A$121.48 based on much stronger growth expectations.
For BHP Group however we'll make it really easy for you with previews of two leading BHP Group Narratives:
These sit on opposite sides of the valuation debate, so they give you a quick feel for how different investors are framing the same stock at the same share price.
🐂 BHP Group Bull Case
Fair value: A$121.48
Implied pricing gap vs A$57.95: around 52% below this fair value estimate
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