BHP Group Limited (BHP) DCF Valuation
TGM's two-stage DCF values BHP Group Limited (BHP) between $60.26 and $106.07 depending on assumptions, with a base case of $76.11. Growth is taken from the company's own record (blend of 5-year revenue and FCF growth (floored at 2%)), fading to 2.5% long-run; the discount rate (8.3%) reflects its beta.
What would today's price require?
$81.02 is justified only if free cash flow grows about +3.4% a year (fading to 2.5% long-run) at a 8.3% required return — faster than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 0.5%/yr | 9.3% | $60.26 |
| Base case | 2.0%/yr | 8.3% | $76.11 |
| Optimistic | 5.0%/yr | 7.3% | $106.07 |
| Analyst DCF (FMP) | independent reference — different model | $60.61 | |
Current Price
$81.02
Market-Implied Growth
+3.4%/yr
vs -0.2% 5Y actual
Model Scenario Range
$60.26 – $106.07
model output — not a price target
BHP DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for BHP (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $11.7B · 2.54B shares · net debt $9.6B
Estimated Fair Value
$74.74
-7.7% vs $81.02
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 2.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $81.02; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 6.3% | $97.89 | $106 | $116 | $129 | $146 |
| 7.3% | $80.24 | $85.09 | $90.96 | $98.20 | $107 |
| 8.3% | $67.78 | $70.98 | $74.74 | $79.21 | $84.61 |
| 9.3% | $58.52 | $60.74 | $63.29 | $66.24 | $69.70 |
| 10.3% | $51.37 | $52.96 | $54.76 | $56.81 | $59.16 |
About BHP Group Limited
BHP Group Limited is a prominent global natural resources enterprise with operations spanning multiple continents, including Australia, Europe, Asia (encompassing China, Japan, India, South Korea, and other regions), North America, and South America. The company's primary activities are organized into distinct divisions: Copper, Iron Ore, and Coal. Its extensive mining portfolio includes the extraction of a wide array of minerals such as copper, uranium, gold, zinc, lead, molybdenum, silver, iron ore, and cobalt, alongside the production of both metallurgical and thermal (energy) coal. In addition to these core endeavors, BHP is also engaged in the integrated process of nickel production—from mining to smelting and refining—and is actively pursuing potash development initiatives. The company further offers a variety of support functions, including towing, freight services, marketing and trading, marketing assistance, finance, and administrative services. Founded in 1851, BHP Group Limited maintains its corporate headquarters in Melbourne, Australia.
- Sector
- Basic Materials
- Industry
- Industrial Materials
- CEO
- Mike Henry