Citi has lowered its recommendation on BHP Group Ltd (LSE:BHP, ASX:BHP) from 'buy' to 'neutral', arguing that a strong set of annual results leaves the miner’s valuation looking stretched.
The note came on Tuesday, following BHP’s full-year numbers.
The world’s largest listed miner reported underlying net profit of $10.1 billion for the year to June.
Citi expects this to dip by 3% to $10.8 billion in the 2026 financial year.
Analysts Paul McTaggart and Ephrem Ravi said dividends had exceeded forecasts but warned it may be hard to match that performance in the year ahead.
Citi highlighted modest copper production growth of 1.4% a year through to 2030, below expected global economic growth.
It also noted that BHP now trades at a 4% premium to its discounted cash flow valuation, using an iron ore price assumption of $85 a tonne.
The bank left price targets unchanged at A$43 in Sydney and £21 in London.
The shares fell 11.71p to 1,974.73p.