BHP’s revision profile is a classic commodity leverage story, with broad-based earnings upgrades driven more by stronger spot prices than any single corporate catalyst. The standout is earnings (EBITDA), which has been revised up around 26% compared with a 16% lift in revenue, highlighting the operating leverage coming through the portfolio and the growing importance of copper ahead of the FY26 result on 18 August.
- We remain bullish on BHP, but the call is increasingly tied to copper—if we are wrong on copper, we will be wrong on BHP.
From a quant perspective, BHP continues to screen well. Net debt is tracking below expectations, cost guidance is towards the better end of the range, the balance sheet leaves room for dividend upside, and the broader operating backdrop remains supportive. Record iron ore volumes, structural copper demand, Jansen progress and the transition to new CEO Brandon Craig all provide potential catalysts.
The known headwind is copper production, with FY27 guidance of 1.65–1.80Mt implying a decline of around 12%. The market has already started to price this in following the mid-July sell-off, although risks remain around declining grades at Escondida and the Port Hedland industrial dispute.
We still see the risk/reward as skewed to the upside. The weaker FY27 copper volume profile is now better understood, while balance-sheet strength, lower costs and potential dividend upside should support the August result. The key swing factor will be Brandon Craig’s capital allocation strategy and the broader FY27 outlook.
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BHP Group (BHP) – Consensus Estimate Revisions: Revenue & EBITDA – Source: Bloomberg
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BHP Group (BHP) – Consensus Estimate Revisions: Revenue & EBITDA – Source: Bloomberg
We’ve covered BHP at length through 2026, especially because it’s our largest holding. However, our main concern towards the miner and copper peers is the very subject we are covering today, i.e. the market’s long; hence, we believe the stock is a “lighten” as opposed to sell into strength.
- We like the risk/reward towards BHP around $60, supported by an estimated 3.7% fully franked yield.
MM is long and bullish towards BHP around $60
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