BHP Group Ltd (ASX: BHP) shares have enjoyed a solid rebound in 2025, but remain well down over the past full year.
Shares in the S&P/ASX 200 Index (ASX: XJO) mining giant closed on Friday trading for $40.92 a share. That's up 3.46% year to date, but shares remain down 10.95% over 12 months and down 18.83% since 29 December 2023.
Following on that decline, and bearing in mind that BHP shares trade on a fully franked trailing dividend yield of 5.4%, is the stock a buy?
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BHP shares: buy, sell, hold?
The sell recommendations on BHP shares have dwindled over recent months, with analyst recommendations on CommSec showing seven with a 'strong buy' rating, nine with a 'hold' rating, and only one with a 'strong sell' rating.
Novus Capital's John Edwards has a hold rating on the ASX 200 mining stock (courtesy of The Bull).
"The world's largest miner produces iron ore, metallurgical coal, copper, nickel and potash," Edwards explained of BHP's diversified operations.
He added:
The company produced 131 million tonnes of iron ore in the first half of fiscal year 2025, up 1% on the prior corresponding period. Production guidance for full year 2025 remains unchanged at between 255 million and 265.5 million tonnes. Total copper production increased by 10% to 987,000 tonnes.
But Edwards isn't recommending buying BHP shares just yet.
"A concern is a large iron ore mine in Guinea may lead to an over-supply of iron ore and subdued prices when it starts producing," he said.
Iron ore ended the week trading for US$106 per tonne.
Edwards has a share price target for BHP of $41, or very close to where shares closed on Friday.
A more bullish outlook
Morgans counts among the brokers with a more bullish outlook for BHP shares.
Morgans has an 'add' rating on the ASX 200 miner and recently lifted its price target to $49.70 a share. That represents a potential upside of 21% from current levels.
Despite being cautious on a potential retrace in iron ore prices, the broker likes BHP's strong balance sheet. And Morgans expects BHP will declare an expectation-busting dividend when the company reports its half-year results on Thursday, 20 February.
Goldman Sachs also has a buy rating on BHP shares with a slightly lower $46.80 price target.
The broker said that BHP is trading at an "attractive valuation", while noting shares trade at a premium compared to rival Rio Tinto Ltd (ASX: RIO).
Goldman said, "We believe this premium can be partly maintained due to ongoing superior margins and operating performance (particularly in Pilbara iron ore where BHP maintains superior FCF/t vs. peers)."
The broker is also bullish on the outlook for copper prices "due to ongoing supply side challenges and increasing demand".
