Is BHP Group Overvalued Amid Rising Short Interest and Strong Rally?

The mining sector has long been a barometer for global economic health, and BHP Group (ASX:BHP, NYSE:BHP) remains one of its most closely watched titans. according to market data, investors are grappling with a critical question: Is BHP overvalued, or is this a contrarian opportunity in a sector where valuations have diverged sharply from the broader market? Let's dissect the numbers, short interest trends, and industry dynamics to uncover the truth.

Valuation Metrics: A Tale of Two Stories

appears modest according to industry data according to financial analysis. according to GURU Focus, . calculated by Simply Wall St, which suggests BHP is significantly undervalued relative to its fundamentals.

The disparity isn't just about P/E ratios. BHP's EV/EBITDA of 5.20 is less than half the industry median of 10.36, reinforcing its affordability. Meanwhile, according to market data, according to market analysis, highlighting how the mining sector has become a relative outlier in the valuation landscape. For contrarians, this divergence raises a compelling question: Is the sector's optimism mispriced, or is BHP being unfairly punished for its size and diversification?

Short Interest: A Contrarian Canary in the Coal Mine

Short interest in BHP has risen steadily since 2023, . While this may seem bearish, , a level that historically signals limited immediate pressure for a short squeeze. However, .

The Bigger Picture: Mining's Valuation Disconnect

according to GURU Focus in Q4 2025 is a red flag for value investors. according to GURU Focus suggests investors are paying a premium for cyclical exposure, even as gold miners trade at historic lows according to Simply Wall St. BHP's lower valuation multiples, by contrast, position it as a defensive play within an otherwise speculative sector.

Consider this: BHP's profitability metrics (EBITDA margins, return on equity) and its diversified portfolio of iron ore, copper, and energy assets according to financial analysis make it less volatile than peers focused on single commodities. Yet the market is treating it as if it shares the same risks as junior miners. This disconnect could be the contrarian's sweet spot.

Conclusion: A Buy for the Bold

BHP's valuation metrics, while up from historical averages, remain compelling relative to the sector. The rising short interest, rather than a warning sign, may reflect the market's failure to fully price in BHP's long-term resilience. For investors willing to bet against the bears, BHP offers a rare combination of affordability, stability, and growth potential in a sector where optimism is running hot.

As always, the key is to balance the numbers with macroeconomic context. If inflation or interest rates stabilize in 2026, BHP's undervalued multiples could attract a wave of capital-especially if shorts are forced to cover. For now, the data suggests BHP is not overvalued but rather a bargain in a sector where bargains are few and far between.