BHP Price Target Slashed, As Broker Shifts Tone on Iron Ore

Freedom Broker has lowered its price target on BHP Group (ASX: BHP) to A$66 from A$92 while maintaining a Hold rating, one of the steepest target revisions of the current reporting season. The call arrives just as the mining giant’s shares consolidate below record territory, crystallizing a debate over whether BHP’s historic shift toward copper can cushion the long-anticipated slide in iron ore prices.

BHP shares closed out the recent session at A$63.78, leaving the stock up 39.38% year to date even after pulling back from its recent all-time high of A$68.77. The revised target represents a roughly 28% reduction from Freedom Broker’s previous A$92 estimate and implies only about 3.5% upside from current levels, a dramatic narrowing that effectively signals the broker sees the stock as fairly valued after its powerful run. The adjustment formed part of a broader recalibration of ratings across the metals and mining sector following first-half reports, rather than a company-specific loss of confidence.

Why The Price Target Cut?

At the heart of the downgrade is iron ore, still a cornerstone of BHP’s earnings engine. The broker acknowledged that the steelmaking ingredient proved unexpectedly resilient in recent months, but cautioned that the decline consensus had long forecast is now materializing as seaborne supply increases and steelmaking demand normalizes. Lower realized prices are expected to compress margins in coming quarters, reducing the scope for further valuation multiple expansion after the stock’s roughly 39% rally.

Yet the first-half numbers also underscored why BHP is no longer a pure iron ore story. For the first full financial period in the company’s history, copper contributed more than 50% of group underlying EBITDA, approximately US$18.2 billion, out-earning iron ore. BHP produced around 2 million tonnes of copper for a second consecutive year and reiterated plans to lift copper output by 40% by FY35 through major projects in Australia, Chile’s Escondida, and Argentina. The milestone repositioned the miner as a primary beneficiary of global electrification and the energy transition at precisely the moment its legacy commodity faces headwinds.

Operationally, the picture is mixed. The Western Australia Iron Ore (WAIO) division maintained output guidance of 258–269 million tonnes at industry-low unit cash costs of roughly US$19.25 per tonne, preserving its status as the lowest-cost major iron ore operation globally, profitability that holds even in a sub-US$90 per tonne price environment. However, capital discipline concerns resurfaced after a US$2 billion cost overrun pushed Stage 2 of the Jansen potash project in Canada to US$6.9 billion, raising questions about long-term returns on invested capital.

Explaining the revision, the Freedom Broker analyst wrote in a research note that iron ore “held far steadier” through the first half of 2026 than the bearish consensus had expected, but warned that the anticipated decline is now playing out. The broker characterized the move as a sector-wide reset following first-half reports rather than an isolated judgment on BHP’s execution.

The View Across The Street

Freedom Broker’s caution reflects a broader shift in sentiment. The consensus rating on BHP now sits at Neutral/Hold, with 12 Hold recommendations against just one Buy and one to two Sells. The average analyst target of approximately A$58.83 suggests markets have already priced the stock at fair value. The range of opinion remains wide: Morgan Stanley’s A$67.50 target represents the bullish ceiling, while Deutsche Bank and Morgans anchor the conservative end between A$51.00 and A$55.30.