BHP’s 30% Profit Surge: Why Analysts Still Won’t Say Buy

BHP just posted one of its strongest earnings years in recent memory, lifting full-year profit by 30% to US$13.2 billion. And yet, when you tally up the professional analysts covering the stock, the majority still will not tell you to buy it.

That contradiction sits at the heart of the current BHP stock outlook. As the largest company on the ASX and a default holding inside most Australian superannuation portfolios, BHP is a stock nearly every investor already owns, whether they realise it or not.

So the question for anyone holding the shares, or thinking about adding to them, is straightforward: does a 30% profit surge change the investment case, or did the professionals already see it coming and price it in?

This piece gives you a data-grounded framework for answering that on three fronts: what actually drove the FY26 result, what the analysts see that the headline numbers do not, and what the income picture really looks like once you account for franking credits.

What actually drove BHP’s standout FY26 result

BHP released its FY26 numbers on 18 August 2026, and the top line was genuinely strong across every metric that matters. Revenue rose 15% to US$58.8 billion. Underlying attributable profit climbed 30% to US$13.2 billion, and underlying EBITDA (earnings before interest, tax, depreciation and amortisation, a common proxy for operating cash generation) grew 27% to US$32.9 billion.

Look closer, and one commodity is doing the heavy lifting. BHP’s average realised copper price rose 35% over the year to US$5.74 per pound, driven by demand from electrification and data centre expansion alongside tight supply.

That price move fed straight into the copper segment, where EBITDA jumped 48% to US$18.2 billion.

That price move fed straight into the copper segment, but the volume side of the equation carries its own uncertainties; copper output risks at Escondida and Antamina, including grade decline and water constraints, set a ceiling on how much BHP can benefit even if prices hold.

Copper segment EBITDA rose 48% in FY26 to US$18.2 billion, making copper BHP’s single largest profit contributor for the first time.

That last point deserves emphasis. For most of its history, BHP has been read as an iron ore company with a bit of copper attached. FY26 flips that framing.

Here is what the shift means for you as a shareholder. When copper becomes the primary earnings lever, BHP’s profits become more sensitive to copper price cycles and Chinese demand swings than to iron ore. If you bought BHP as a proxy for iron ore, or simply for its size and stability, the engine underneath your investment has quietly changed.

That is why the composition of these earnings matters as much as the total. A “profit up 30%” summary tells you the year was good. It does not tell you whether that strength is repeatable, and the answer to that question now runs almost entirely through the copper price.

Why analysts remain neutral even after a 30% profit surge

The neutrality starts with simple arithmetic. In the weeks after the result, BHP’s ASX shares were trading 6.9% to 9.8% above consensus fair value, depending on the aggregator. The ASX consensus target sat at roughly A$59-60 (TS2.tech had A$59.86 across 17 analysts on 22-23 August; CMC Invest had A$59.23 across 15 analysts), while the market price was above that line.

The US listing told the same story. On 18 August 2026, BHP’s American shares last closed at US$48.01 against an average target of US$43.33, a premium to target of roughly 9.8%.

When a share price already sits above where most brokers think it should, the upside that normally justifies a Buy rating simply is not there. That mechanical fact is the starting point, but it is not the whole reason.

Brokers cite three concerns repeatedly: the valuation overhang, uncertainty over capital spending at the Jansen potash project, and the risk that current commodity prices are cyclically high rather than a permanent new level. A consensus below the share price does not mean analysts think BHP is a poor business. It means they think the market has already paid for the good news.

What individual brokers are saying post-result

The distribution of ratings makes the caution concrete. Of TS2.tech’s 17-analyst panel, 12 were Hold, 4 Buy and 1 Sell. CMC Invest’s 15-analyst panel showed 13 Hold, 1 Buy and 1 Sell.

Buy:

• Morgan Stanley: target A$67.50 (raised from A$67.00 post-result), the highest in the surveyed group
• JPMorgan: target A$67.00

Hold:

• Bank of America: target A$65.00
• Citi: target A$63.00
• RBC: target A$60.00
• Macquarie: target A$58.50 (implying roughly 10.2% downside)
• Bernstein: target A$44.02 (implying roughly 33% downside)
• Barclays (London/NYSE line): Equalweight, target raised to GBP28.25

Sell:

• Morgans: downgraded to Sell post-result, target A$55.30 (roughly 19% downside)

Deutsche Bank held the lowest numerical target in the surveyed group at A$51.43, though its exact rating designation was not confirmed in secondary sources.

What should catch your eye is the spread. The gap between Morgan Stanley’s A$67.50 and Bernstein’s A$44.02 is enormous for a single large-cap stock. That is not analysts quibbling over discount rates. It reflects genuinely divergent views on where copper and iron ore prices settle from here, and it tells you the “consensus” is really an average of strongly opposing bets rather than a settled view.

The Jansen problem: what a US$15.3 billion potash bet means for BHP investors

Jansen is BHP’s potash project in Canada, a bet on fertiliser production that would push the company’s diversification beyond metals and coal. Potash is a potassium-based crop nutrient, and the project is meant to give BHP exposure to long-term global food demand. The catch is the cost, which has climbed steadily.

Stage 1 has risen to US$8.4 billion, up from a prior guidance range of US$5.7-7.4 billion, and was about 84% complete as at 30 June 2026, with first production targeted for mid-2027. Stage 2 has jumped roughly 40% to US$6.9 billion from an earlier estimate of US$4.9 billion, but is only around 16% complete, with first production not expected until late FY2031.

Add the two stages together and BHP is committed to roughly US$15.3 billion on a single project.

BHP booked a US$2.3 billion impairment on Jansen in FY26, a concrete signal that the project has already cost materially more than originally planned.

Jansen cost escalation has followed a pattern seen across major mining megaprojects globally, where initial feasibility estimates systematically understate the complexity of underground mine development, and the FY26 impairment suggests BHP’s own internal assumptions have had to reset materially.

BHP is maintaining FY27 group capital expenditure guidance at US$11 billion despite the overruns, and roughly US$2 billion of additional Jansen spending is due between FY27 and FY31.

Here is the detail that matters most for your decision: BHP has given no guidance on the year-by-year Jansen capex profile beyond FY27. That means you cannot model the company’s free cash flow with any confidence past the next 12 months.

For an income-focused shareholder, that uncertainty is the whole game. Jansen is not a one-year risk to the dividend. It is a commitment that absorbs capital across most of the coming investment cycle, and the further out you look, the blurrier the free cash flow picture becomes. That directly limits how much of a premium above fair value it is rational to pay today.

BHP’s income case for Australian investors: what the FY27 dividend actually looks like

Start with the number income investors are searching for. CMC Invest forecasts an FY27 dividend of A$2.07 per share. That is a step down from the US$1.72 FY26 payout, which rose 56% year-on-year, and the decline is deliberate. FY26 was a cyclical peak driven by that surging copper price, not a new baseline you can bank on.

ASX dividend payment cycles, including ex-dividend dates, record dates, and the timing of franking credit pass-throughs, determine when income hits your account and how credits flow through different account structures, details that matter when sizing an income position in a stock like BHP.

On the FY27 forecast, the yield picture breaks down like this:

1. Cash dividend only: a projected yield of 3.4%, based on the A$2.07 payout.
2. Franking-inclusive yield: 4.9% once franking credits are added, the number that matters most for Australian investors.
3. Peer context: BHP has historically yielded less than ASX mining peers such as Fortescue (ASX: FMG) and Rio Tinto (ASX: RIO), and FY26 has not changed that ranking.

The projected FY27 franking-inclusive yield is 4.9%, competitive for a large-cap but not exceptional against higher-yielding ASX mining peers.

To make it tangible, consider a A$15,000 investment. That buys roughly 246 shares. At the projected A$2.07 dividend, those shares would generate about A$509.22 in cash income, rising to about A$727.46 once franking credits are included.

Franking credits, which pass on the company tax BHP has already paid so you are not taxed twice on the same profit, lift the effective yield meaningfully. For investors in higher marginal tax brackets, the jump from 3.4% to 4.9% is real money.

But read that 4.9% as a forecast, not a promise. It rests on commodity price assumptions, and if copper or iron ore retreat from FY26 levels, both earnings and dividend capacity fall with them. For an income portfolio, the honest read is that BHP offers a competitive but cyclical yield, not a stable one.

Past performance does not guarantee future results. Financial projections are subject to market conditions and various risk factors.

Making an informed call on BHP at current valuations

Pull the four threads together and the decision becomes clearer. Three variables should anchor any view you take on BHP right now: the valuation premium (the stock trades above most broker targets), the Jansen overhang (material free cash flow uncertainty through FY31), and the copper cycle dependency (earnings now tied to a single commodity at an elevated price).

Two coherent positions follow. The bull case, held by Morgan Stanley and JPMorgan with targets of A$67.00-67.50, rests on structural copper demand from electrification and grid investment holding the earnings base up. The bear case, reflected in Morgans’ Sell at A$55.30 and Bernstein’s target near A$44, argues that copper prices are cyclically high and that Jansen will swallow the free cash flow that would otherwise sustain the dividend.

The consensus mid-point of roughly A$59-60 sits below the prevailing market price, which is why most brokers land on Hold.

Three variables that will determine whether BHP outperforms consensus

• Copper price trajectory into 2027: whether the US$5.74/lb realised price was a cyclical peak or a new normalised level. SMM (via Futunn) forecasts China’s copper demand to grow around 1% in 2026 and over 2% in 2027.
• Jansen capex profile beyond FY27: BHP has offered no guidance past next year. Any further cost escalation on Stage 2 would deepen the free cash flow drag.
• China grid and infrastructure execution: the bull case rests on planned investment programmes actually being deployed, not merely announced.

The wide gap between the A$44 and A$67 targets is not noise. It reflects a genuine disagreement about where copper settles after 2026. BHP at current levels is neither obviously cheap nor obviously expensive; the outcome depends on whether you believe the copper cycle has structurally repriced or is sitting at a peak. Deciding which side of that argument you are on is the most useful conclusion you can take from here.

For investors exploring whether BHP is the right mining exposure or whether alternatives offer better risk-adjusted value at current prices, our full explainer on top ASX mining shares in FY27 covers the analyst-rated opportunities across the sector, including producers with lower valuation premiums and comparable dividend credentials.

This article is for informational purposes only and should not be considered financial advice. Investors should conduct their own research and consult with financial professionals before making investment decisions.