BHP shares are up 9% in a month. Are they still good value?

The BHP Group Ltd (ASX: BHP) share price has risen 9% in just one month, which is impressive. Investors may be wondering whether the mining giant can deliver more gains or if the easy money has been made already.

The ASX mining share has largely recovered from the tariff-induced sell-off, as the chart above shows. It's probably not the last we've heard of tariff volatility, one way or another. For example, this week, US President Trump announced a 100% tariff on movies produced internationally.

Getting back to the ASX miner, with the BHP share price sitting below $40, it's worth asking whether the business is an attractive investment.

Is the BHP share price attractive?

UBS currently has a price target of $40 on the miner. A price target is where the broker sees the business trading 12 months from the investment call, so it suggests the miner could rise by approximately 6% from where it is today. This view came after the miner's FY25 third quarter update, where production was solid but impacted by weather events.

The broker recently cut its 2025 and 2026 demand and price forecasts for key commodities because of the expected impact of the trade war. UBS noted there continues to be significant uncertainty on the full impact on global growth and how China will respond.

UBS sees negative risks in the near term for both copper and iron ore prices if demand weakens.

The broker also notes that capital expenditure, mainly related to copper, is about to ramp up from US$8.8 billion in FY24 to around a guided US$10 billion in FY25 and US$11 billion in the medium term. This will be a key factor in net debt reaching the top of its US$5 billion to US$15 billion guidance range by the end of FY25. With this backdrop, dividends to owners of BHP shares will likely be in focus. UBS expects BHP to maintain a 50% dividend payout policy with its FY25 result in August and also provide more detail on how it can "flex" its capital expenditure in the medium term.

Finally, UBS noted that potential acquisitions could be both a risk and a catalyst for BHP, such as its attempt on Anglo American.

Profit forecasts

UBS is projecting that BHP's net profit could fall to US$9.9 billion in FY25 and that it could pay an annual dividend per share of US 98 cents in the current financial year.

In FY26, which starts in a couple of months, UBS is projecting that BHP could achieve a net profit of US$7.7 billion, before bouncing back to US$10.2 billion in FY27.

While there could be volatility in the short term, it seems BHP still has a positive longer-term future, particularly if it can capitalise on copper.

The post BHP shares are up 9% in a month. Are they still good value? appeared first on The Motley Fool Australia.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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