BHP Group Limited (BHP): A Bull Case Theory

Tue, Sep 16, 2025, 12:02 PM 3 min read

We came across a bullish thesis on BHP Group Limited on The Value Beehive’s Substack by The Bee. In this article, we will summarize the bulls’ thesis on BHP. BHP Group Limited's share was trading at $54.2 as of September 8th. BHP’s trailing and forward P/E were 15.3 and 13.6 respectively according to Yahoo Finance.

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BHP Group, as of September 2025, presents an attractive valuation opportunity, trading at a trailing P/E of approximately 15×, well below fair-value estimates closer to 20× and beneath broader market multiples. Forward earnings projections remain modest, supporting the view that the stock is reasonably priced relative to its earnings potential. The company generated roughly $9.3 billion in free cash flow over the past twelve months, translating to a mid-teens price-to-FCF multiple of around 15×, notably below the industry median of 19×.

On an EV/EBITDA basis, BHP trades at about 6×, reflecting a lean valuation for a diversified mining major with substantial operational scale. This combination of discounted earnings, strong cash generation, and conservative leverage positions BHP as a fundamentally undervalued name, offering investors a margin of safety even amid the natural volatility of the commodity cycle. The company’s solid free cash flow and manageable balance sheet provide flexibility to navigate market swings, reward shareholders, and potentially fund growth or return capital.

Overall, BHP’s current valuation suggests an opportunity to invest in a high-quality, cash-generative mining business at an attractive entry point, with multiple levers for upside as commodity prices normalize or improve. Its financial discipline and diversified portfolio make it resilient to cyclical pressures, reinforcing its appeal for long-term investors seeking a combination of value and stability in the resources sector.

Previously we covered a bullish thesis on Teck Resources Limited (TECK) by Gregg Jahnke in December 2024, which highlighted the company’s shareholder-focused strategy, strong net cash position, and copper and zinc assets supporting growth potential. The company's stock price has depreciated approximately by 12.5% since our coverage. The thesis still stands as TECK retains a solid balance sheet and strategic positioning. The Bee shares a similar bullish perspective but emphasizes BHP’s discounted earnings and strong free cash flow.

BHP Group Limited is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 31 hedge fund portfolios held BHP at the end of the first quarter which was 28 in the previous quarter. While we acknowledge the potential of BHP as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.