Down 8%, is the BHP share price a buy?

The BHP Group Ltd (ASX: BHP) share price has come off the boil.

The mining giant is trading around $60.34, down from its 52-week and record high of $65.98. That puts the BHP share price about 8% below its recent peak.

For a company of BHP’s size, that is a meaningful pullback. It also raises a fair question for investors: is this a chance to buy? I think it could be.

The Jansen update was disappointing

Part of the recent weakness can be linked to BHP’s update on its Jansen potash project.

The company has completed a detailed review of Stage 2 and now expects the total investment estimate to rise from US$4.9 billion to US$6.9 billion, including contingencies. First production is now expected in late FY31, two years later than planned.

That is clearly disappointing.

A US$2 billion cost increase is substantial, and the timing shift means investors will have to wait longer for the next stage of Jansen to contribute. BHP said the majority of the increase relates to additional construction hours, more materials, and escalation identified through its review.

I do not think investors should simply brush that aside. Large mining projects are complex, and cost discipline is important.

At the same time, I do not think the update changes the entire investment case for BHP.

The company still expects Jansen Stage 2 to deliver approximately 4.36 million tonnes per annum of production. After ramp-up, combined output from Jansen is expected to be 8.5 million tonnes per annum, which BHP says would represent around 10% of total global potash production.

The project is now taking longer and costing more, but it still gives BHP exposure to a commodity tied to food security and agricultural productivity. I see that as a useful future boost rather than the main reason to own the stock today.

Copper remains the bigger attraction

For me, the strongest reason to stay positive on BHP is copper.

The world is becoming more electricity-intensive. Power grids, renewable energy, data centres, electric vehicles, industrial systems, and artificial intelligence (AI) infrastructure all require more copper.

At the same time, copper supply can be difficult to bring on quickly. New mines require huge capital, long approvals, technical expertise, and often many years of development.

That is a powerful position for a company with BHP’s scale.

Iron ore remains important to group earnings, and commodity prices will always move around. But I think BHP’s copper exposure is becoming more valuable as investors look further ahead.

If copper prices remain elevated over the long term, BHP could be well placed to keep producing strong cash flows.

Valuation and income

The pullback also makes the valuation a little more interesting.

According to CommSec, consensus estimates point to earnings per share of $3.55 in FY26 and $3.81 in FY27.

At a share price of around $60.34, that puts BHP on a price-to-earnings ratio of approximately 17 times FY26 earnings and 15.8 times FY27 earnings.

That is not a screaming bargain for a cyclical miner, but it looks reasonable if investors believe copper, iron ore, and future-facing commodities can support stronger earnings over time.

The dividend also remains part of the appeal. CommSec forecasts dividends per share of $2.12 in FY26 and $2.02 in FY27, implying dividend yields of around 3.5% and 3.3%, respectively.

Those yields are useful, especially alongside the potential for capital growth if commodity markets remain supportive.

Foolish takeaway

I think the BHP share price remains a buy for long-term investors.

The Jansen update is frustrating, and it reminds investors that even world-class miners can face cost and schedule pressure on major projects. But BHP’s broader position remains attractive.

The company has scale, a strong asset base, iron ore cash generation, and growing exposure to copper. Potash still adds a longer-term option, even if the timeline has moved further out.

After an 8% pullback from its record high, I think the BHP share price offers a reasonable entry point for investors who can handle the ups and downs that come with owning a global miner.

The post Down 8%, is the BHP share price a buy? appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino 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.