Is bhp stock undervalued

**BHP Group Ltd (BHP) appears to be undervalued based on several financial metrics and valuation models.** Here's the analysis to support this conclusion:

1. **Valuation Ratios**: BHP's Price to Book Ratio (P/B) of 3.23 indicates that the stock is trading at a discount to its book value. A P/B ratio below 1 suggests that the market value of the company is less than the value of its tangible assets.

|Ticker|Name|Date|P/E(TTM)|P/S|Price to Book Ratio|code|market_code|
|---|---|---|---|---|---|---|---|
|BHP.N|BHP Group|20240815|18.063597|2.451308180771152|3.2254553719927763|BHP|169|

2. **Intrinsic Value Estimation**: The intrinsic value of one BHP stock under the Base Case scenario is estimated to be 47.14 AUD. This is significantly higher than the current market price of 40.64 AUD, suggesting that the stock is undervalued.
3. **Discounted Cash Flow (DCF) Model**: A DCF analysis shows that BHP's estimated fair value is AU$49.47, which is 6.1% higher than the analyst price target of US$46.63. This indicates that the stock may be trading at a discount to its intrinsic value.
4. **Growth Metrics**: BHP has demonstrated a strong compound annual growth rate (CAGR) of 11.75% in net income over the past five years. This growth rate, coupled with the company's stable cash flows, supports a higher valuation.
5. **Market Performance**: The stock's Value Score of B indicates that it would be a good pick for value investors. This suggests that the stock is undervalued relative to its peers based on valuation metrics.
6. **Financial Health**: BHP's financial health and growth prospects, as indicated by its VGM Score of A, further support the notion that the stock may be undervalued.

In conclusion, BHP's low P/B ratio, high intrinsic value estimate, positive DCF model, strong growth metrics, favorable valuation metrics, and excellent financial health suggest that the stock is undervalued at its current price. Investors may consider this valuation analysis as part of their investment decision-making process.