Valuation is always subjective and your work looks thorough, so certainly wouldn't call it materially incorrect.
Also great to see some actual analysis which this thread generally lacks. A genuine well done on that.
The key point for me is that the valuation technique used in Australia for valuing resource stocks (buy side, sell side, carrying value, independent expert etc) is NPV. This is because the typical lump cashflow profiles of resource stocks are not well suited to multiples.
As an example, FMG has a much greater capex burden than BHP (relative to market cap) with replacing Firetail.
Plus price forecasts for iron ore are for it to weaken substantially, whereas most (not all) of the commodities that BHP produces are forecast to stay around current levels or rise
BHP's oil and gas division has high operating margins (even now) so is a less "risky" business than mining which means the earnings quality is different.
NPV captures these aspects as part of the intrinsic valuation, with multiples you tend to end up with anomalies (such as you have ended up with as your calc is nearly 50% higher than the current share price) that need to be explained away. Which calls into question the methodology to start with.
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$20.10 |
Change
0.700(3.61%) |
Mkt cap ! $61.88B |
Open | High | Low | Value | Volume |
$20.26 | $20.49 | $19.94 | $337.2M | 16.71M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
2 | 38056 | $20.09 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$20.15 | 20000 | 1 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
1 | 7000 | 20.080 |
1 | 5000 | 20.050 |
3 | 2700 | 20.020 |
8 | 2885 | 20.000 |
1 | 2500 | 19.990 |
Price($) | Vol. | No. |
---|---|---|
20.160 | 11740 | 2 |
20.180 | 180 | 1 |
20.200 | 966 | 1 |
20.260 | 3200 | 1 |
20.280 | 993 | 1 |
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