BHP Copper Price Surge Drives 30% Profit Hike

BHP Group Ltd (BHP) released its fiscal 2026 results on stronger copper prices, leading to a 30% increase in underlying net profit after tax to $13.2 billion. This translates to $2.60 per share for the company's investors.

The copper price surge, which has risen by half over the last year to near historical highs, contributed significantly to BHP's improved performance. The company's shares rose 3% following the announcement of a fully franked final dividend per share of $0.99, up 65%, and a payout ratio above the target minimum of 50%.

While the result was slightly weaker than expected, BHP's unit cost and capital expenditure guidance was in line with Morningstar Australia's estimates. The company maintained its production guidance, but plans to expand copper production from existing mines, including those in Chile and South Australia.

Morningstar Australia revised their earnings estimates for BHP, raising their DPS forecasts by an average of 9% for fiscal 2027 through 2029 based on a higher payout ratio. The fair value estimate for the company was also raised to $46 per share due to the time value of money and potential additional proceeds from selling noncore assets.