BHP’s Jansen Potash Project 78% Complete, DCF Implies Shares Are Overvalued
BHP•Citigroup maintained a Neutral rating on BHP while the Jansen potash project reached 78% completion with production slated for mid-2027. A DCF analysis pegs intrinsic value between $33.34 and $57.90, well below current levels near $90, and a potential electrical workers strike at Port Hedland poses further operational risk.
1. Citigroup maintains Neutral rating
Citigroup has upheld its Neutral rating on BHP as of June 8, signaling a hold recommendation with no buy or sell bias. The stock was trading around $84 when the stance was issued, reflecting a cautious view despite ongoing project advances.
2. Jansen potash project reaches 78% completion
The Jansen potash project has achieved 78% completion, backed by new rail agreements with Canadian National Railway and Canadian Pacific Kansas City to secure future logistics. First production is targeted for mid-2027, expanding BHP’s commodity offerings.
3. Valuation concerns and Port Hedland risk
A discounted cash flow analysis estimates BHP’s intrinsic share value at $33.34 to $57.90, significantly below recent trading near $89 after an 88.1% one-year rally, raising overvaluation flags. Meanwhile, a potential electrical workers strike at Port Hedland could disrupt iron ore exports and add to operational uncertainty.
