BHP Group Limited: Downgrade to Neutral. Taking a little risk off…

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BHP Group Limited: Downgrade to Neutral. Taking a little risk off…

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BHP Group Limited

Downgrade to Neutral. Taking a little risk

off…

Rating Change: NEUTRAL | PO: 69.00 AUD | Price: 59.10 AUD

Downgrade to Neutral. Valuation full. China slowing. 22 May 2026

Downgrade to Neutral: 1) Fairly full valuation 2) China credit impulse turned negative 3) Equity

Increasing oil related global macro risks related to the conflict in Middle East. Valuation:

Big miners typically trade in range of c. 0.6-1.2x P/NPV through cycle. BHP trades close

Key Changesto top of this range (c. 1.1x), price objective is unchanged at A$69/sh, set at 1.2x P/NPV.

To be clear, this is very much a top-down call rather than a call on stock specifics. Aside: (US$) Previous Current

We also downgrade “fellow” large-cap diversified miner, Rio Tinto, to Neutral (see our Inv. Opinion B-1-7 B-2-7

report). Inv. Rating BUY NEUTRAL

Valuation. Upgrade cycle. Positioning. Performance. Equity Research

Jason Fairclough >>

Valuation: Large cap-diversified miners typically trade on a range of c. 0.6-1.2x P/NPV Research Analyst

through the cycle with peak multiple being paid during periods of high commodity prices MLI (UK)

+44 20 7995 0225

and large earnings upgrades. Upgrades: The earnings upgrade cycle for the broader jason.fairclough@bofa.com

sector started in mid-2025. While earnings revisions are still positive, we think the Kate McCutcheon >>

“easy” gains in this cycle have already been made. We also consider growing pressure on Research Analyst Merrill Lynch (Australia)

costs, from here. Positioning: Our fund-managers’ survey (EMEA) indicates investors Chen Jiang >>

claim to have been overweight Basic Resources (mainly miners) for c. 5 months now. Research Analyst