The BHP Group Ltd (ASX: BHP) share price has been having a tough time recently.
So much so, the mining giant's shares are down 24% from their highs and trading within a whisker of their 52-week low.
Does this make its shares a bargain buy now? Let's see what analysts are saying about the Big Australian.
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Is the BHP share price in the bargain bin?
While recent share price weakness has been disappointing, it could prove to be a buying opportunity based on what analysts are saying.
For example, late last month the team at Morgans put an add rating and $48.30 price target on its shares. Based on the current BHP share price, this implies potential upside of almost 25% for investors over the next 12 months.
Morgans likes the miner due to its diverse high-margin operations, which will soon include exposure to potash. It said:
BHP has extensive iron ore, copper, nickel and coal operations, and will soon add potash to its portfolio once its massive Jansen project comes online in late 2026. Besides nickel, which has proven volatile, the rest of BHP's basket of market exposures share the similar characteristic of typically boasting bumper margins throughout the cycle.
Morgans also expects a 5.4% fully franked divided yield from its shares in FY 2025.
Who else is bullish?
Another broker that sees significant value in the BHP share price is Goldman Sachs.
Its analysts have a buy rating and $49.10 price target on its shares, which implies potential upside of almost 27% for investors from current levels.
And while the broker is expecting a smaller dividend yield of 4.5% in FY 2025, this is still above average for the Australian share market.
Goldman thinks its shares are undervalued based on its superior margins and operating performance. It recently commented:
BHP is currently trading at ~5.5x NTM EBITDA (25-yr average EV/EBITDA of 6.6x), a premium to RIO on ~4.5x; and at 0.85xNAV vs RIO at 0.75x NAV. Over the last 10 years, BHP has traded at a ~0.5x premium to global mining peers. We believe this premium can be partly maintained due to ongoing superior margins and operating performance (particularly in Pilbara iron ore where BHP maintains superior FCF/t vs. peers).
All in all, these brokers appear to believe that the mining giant's shares are a great option for anyone looking for exposure to this side of the market.
