Down almost 7% in 3 days, are BHP shares finally good value?

A fast pullback has put BHP shares back on investors' radar.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Less than 3 weeks ago, BHP Group Ltd (ASX: BHP) shares were trading at record highs.

Now they're heading the other way.

The mining giant is down another 1.13% to $60.18 on Monday morning, extending a sell-off that started late last week.

BHP closed at $64.58 last Wednesday, so the stock has dropped around 6.8% in just 3 trading sessions.

Friday did most of the damage, with the shares dropping 4.05% as mining shares were hit by uncertainty around US copper tariffs.

After such a quick pullback, some investors may be wondering whether BHP is starting to look cheap again.

I'm not sure we're there yet.

Female miner standing next to a haul truck in a large mining operation.

Image source: Getty Images

The rally has still been huge

The first thing I'd like to point out is just how far BHP shares have already run.

Even after the recent fall, the stock is still up around 33% in 2026.

It is now about 13% below its 52-week high of $68.77, reached in late August.

So, while the 6.8% drop looks significant, BHP is coming off a very strong run.

The business itself has also been performing well.

FY26 revenue increased 15% to US$58.8 billion, while underlying EBITDA rose 27% to US$32.9 billion. Net debt fell to US$8.7 billion, and the full-year dividend increased to 172 US cents per share.

Copper has become a large part of the business, generating around 54% of underlying EBITDA last year.

Is BHP actually cheap?

This is where I think things get more interesting.

The average 12-month broker price target tracked by TipRanks is $59.23, around 2% below today's share price.

Of the 15 analysts shown, 13 have a hold rating, with only 1 buy and 1 sell.

There's also a wide range of views. Morgan Stanley has a $68 target, while Freedom Capital Markets is at $66. Jefferies and Bank of America are both sitting at $65.

At the other end, Bernstein has a $44 target.

Would I buy after the fall?

I can see why investors might be tempted to buy after the latest decline.

BHP is still a very profitable business, and its growing exposure to copper gives investors another reason to stay interested.

But there are still a few things to watch, including softer iron ore prices and ongoing labour negotiations at Port Hedland.

At $60.18, I think BHP looks more attractive than it did near $69.

With broker targets clustered close to the current price, I'd still want BHP to fall a little further before buying.

Bank of America is an advertising partner of Motley Fool Money. Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Jefferies Financial Group. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Resources Shares

Two miners at a mine site on their tablets, with mining machinery behind them.
Resources Shares

$10,00 invested in Rio Tinto and Fortescue shares 3 years ago is now worth…

Here’s how the three-returns from a $10,000 investment in Rio Tinto and Fortescue shares compare.

Read more »

Businessman studying a high technology holographic stock market chart.
Resources Shares

CEO sells $3.9 million of shares. Should investors be worried?

A big insider sale has caught investors’ attention.

Read more »

Two workers working with a large copper coil in a factory.
Resources Shares

Down almost 10%! Why are ASX copper shares tanking?

The market for the industrial metal has been shaken.

Read more »

Two miners laughing and having fun while using smart phone during their coffee break.
Resources Shares

St Barbara share price on watch after a huge announcement

Investors could be in line for another big capital return.

Read more »

Calculator and gold bars on Australian dollars, symbolising dividends.
Resources Shares

West African Resources delivers profit surge and special dividend in H1 2026

West African Resources delivered strong first-half earnings, record profit, and a special dividend for shareholders as gold output surged.

Read more »

happy mining worker fortescue share price
Resources Shares

How much could the Fortescue share price rise in the next year?

Let’s dig into what Fortescue could achieve.

Read more »

Female miner uses mobile phone at mine site
Broker Notes

Up 62% in a year are BHP shares now a buy, hold or sell?

A leading analyst provides his outlook for BHP’s surging shares.

Read more »

Young man in shirt and tie staring at his laptop screen watching the Paladin Energy share price tank today
Resources Shares

South32 shares reach fresh 52-week high: Can they keep climbing?

Find out what brokers tip next.

Read more »