BHP Group: Supportive Production, But Heavy CAPEX Ahead, Still Neutral

2025-07-20 08:37:14 ET

We’re returning to our coverage of BHP Group ( BHP )( BHPLF ) , a name we follow closely given our strong research foundation across the mining sector here at the Lab. While we historically favored Rio Tinto ( Underappreciated Copper Growth ), we believe BHP missed a strategic window in pursuing Anglo American, which has since accelerated its transformation and execution. The current momentum makes a renewed evaluation of the deal more compelling. We also maintain a firm conviction in Glencore . Our equal-weight stance has been validated with a stock price performance of -0.94% since February-end (Fig. 1) and was supported by 1) the absence of provisions for outstanding litigation, 2) a lower dividend payout, 3) limited earnings momentum, and 4) Rio Tinto’s more attractive valuation....

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