MELBOURNE, August 21, 2026, 09:05 AEST
- Copper accounted for 54% of BHP’s underlying EBITDA in fiscal 2026, surpassing iron ore.
- BHP stock finished up 3.2% at A$65.75 ahead of Friday’s market open in Australia.
- The closing price is roughly 9% higher than the consensus price target of A$59.86.
BHP Group Limited ASX:BHP is now primarily driven by copper profits. Underlying EBITDA from copper reached US$18.19 billion, surpassing iron ore, which contributed US$14.53 billion. This marked the first time copper outperformed iron ore over a full year.
The ASX cash market remained closed early on Friday. BHP closed Thursday at A$65.75, advancing 3.2%, with a turnover of A$608.5 million. The increase made it the leading stock in Australia by traded value.
The surge increased BHP’s market capitalisation by approximately A$10 billion, based on a closing valuation of A$323.7 billion. Stronger profits, improved cash flow, and the largest dividend in four years prompted investor support.
| Fiscal 2026 measure | Result | Year-on-year change |
|---|---|---|
| Revenue | US$58.8 billion | up 15% |
| Underlying EBITDA | US$32.9 billion | increase of 27% |
| Underlying attributable profit | US$13.2 billion | up 30% |
| Net profit | US$9.8 billion | rise of 9% |
| Full-year dividend | US$1.72 per share | rose 57% |
The main shift for investors is the earnings composition. Copper made up 54% of the group’s underlying EBITDA, and its 70% margin was higher than the group’s overall margin of about 56%. Robust prices offset a 3% drop in production.
| Copper indicator | Fiscal 2026 | Investor read-through |
|---|---|---|
| Underlying EBITDA | US$18.19 billion | Up 48%; 1.25x iron ore EBITDA |
| Realised price | US$5.74 per pound | Increase of 35% |
| Production | 1.953 million tonnes | Down 3% |
| Fiscal 2027 guidance | 1.65–1.80 million tonnes | Midpoint is 11.7% lower than 2026 |
| Underlying EBITDA margin | 70% | Roughly 14 points higher than group margin |
Chief Executive Brandon Craig stated that copper demand is being driven by data centres and power infrastructure. According to BHP, demand is projected to climb to 50 million tonnes by 2050, compared with roughly 34 million at present. Craig also committed to production increases of as much as 40% by 2035.
The short-term production outlook adds pressure, with the midpoint indicating an 11.7% drop next year. Declining grades at Escondida weigh most heavily, despite BHP pushing forward with longer-term copper growth projects.
Balance-sheet strength is still significant. Net debt dropped to US$8.69 billion, coming in lower than analysts had forecast. The US$8.7 billion dividend represents roughly 66% of underlying profit. Capital and exploration expenditure totaled US$10.3 billion.
| Market measure | August 20 close | Context |
|---|---|---|
| Share price | A$65.75 | Rose 3.20% in the session |
| Market capitalisation | A$323.69 billion | Market value increased by about A$10 billion in one day |
| Trailing P/E | 22.96 times | Higher than Fortescue’s 12.92 times |
| Dividend yield | 3.07% | Lower than Fortescue’s 6.76% |
| Consensus target | A$59.86 | 8.96% under the closing price |
The current valuation relies on copper maintaining its support. BHP is trading at close to 23 times trailing earnings. Meanwhile, Fortescue Ltd ASX:FMG trades at about 13 times, but its portfolio is still heavily weighted toward iron ore.
| Analyst | Recommendation | Target | Return to target |
|---|---|---|---|
| Bernstein, August 11 | Hold | A$44.02 | -33.0% |
| Morgan Stanley, August 6 | Buy | A$67.00 | +1.9% |
| Citi, August 3 | Hold | A$63.00 | -4.2% |
| Bank of America, July 22 | Hold | A$65.00 | -1.1% |
| 17-analyst consensus | Hold | A$59.86 | -9.0% |
Analysts have remained cautious during the rally. Morgan Stanley’s target of A$67 implies a gain of under 2%. The average target is nearly 9% below the current level, even with improved earnings and a move toward copper.
Risks: Copper prices continue to follow a cyclical pattern, with output guidance for fiscal 2027 indicating a decline. Lower Escondida grades, potential labour issues, and rising project costs could put pressure on margins. A slowdown in China may also curb demand for iron ore.
The market open on Friday will indicate if the earnings re-rating has further to run. Sustained momentum relies on copper expansion and prudent capital allocation. In the short term, BHP’s share price has surpassed most analysts’ target estimates.
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