BHP
BHP Group Limited
$77.85
Platform & Compounding FCF
50%
Two-stage FCF DCF
Mild
·
Conviction
Fair Value
Trading 12.0% below fair value
You pay
$77.85
Bear
$70.75
Fair
$88.45
Bull
$104.65
Bear
$70.75
-9.1%
4% stage 1 growth, 11% discount
Fair
$88.45
+13.6%
7% stage 1 growth, 11% discount
Bull
$104.65
+34.4%
10% stage 1 growth, 11% discount
Adjust Assumptions
7.3%
11.0%
3.0%
Key Value Driver
FCF growth rate (7% base case)
Terminal Value % of EV
37%
Implied Market Multiple
15.6x
Market is pricing in (growth)
5.7%
vs 7.3% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (31 analysts)
$95.00
Divergence from AlphaVal
7%
Summary
Using a two-stage FCF DCF with 7% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $88.45 per share.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions