Financial advisory firm Bernstein has cut its rating for BHP Group’s shares (ASX:BHP) this week from Outperform to Market-Perform, whilst also reducing their price target from $52.50 to $50.50. This decision reflects Bernstein’s assessment of limited upside potential for BHP, as the firm re-evaluates its expectations for the iron ore sector. BHP’s shares have responded to this downgrade with a drop of 2.3% since the start of this week, bringing the rolling 12 month decline to 16.41%.

The downgrade is primarily due to a reduction in forecasts for iron ore prices starting in 2026, aligning with concerns regarding the potential market surplus resulting from increased iron ore supply, notably from the Simandou project. Bernstein anticipates that iron ore prices will stabilise in the range of $79–85 per tonne in real 2025 dollars. Analyst Bob Brackett commented, “We downgrade BHP from Outperform to Market-Perform as we don’t see meaningful upside after lowering our iron ore price estimates from 2026 onwards.”

The firm projects global iron ore supply will grow at an annual rate of 2.2% through 2030, while demand is expected to increase by just 0.5% annually. This imbalance is contributing to a cautious perspective on long-term prospects.

Bernstein’s adjustment comes after previous upward revisions in September 2024, which were influenced by early momentum in iron ore prices at the time. However, these prospects have been tempered by skepticism regarding BHP’s long-term copper strategy.

Don’t Buy Just Yet

You will want to see this before you make any decisions.

 

Top Australian Brokers

 

Before you decide which shares to add to your portfolio you might want to take a look at this special report we recently published.

Our experts picked out The 5 best ASX shares to buy in 2025.

We’re giving away this valuable research for FREE.

Click below to secure your copy

Secure your FREE copy