Update shared on04 Sep 2025
Fair value Decreased 0.28%Analysts have modestly lowered their price target for Rio Tinto Group to £51.49, reflecting increased caution due to downside risks in iron ore prices and muted Chinese stimulus, with earnings estimates trimmed and consensus now factoring a more conservative commodity outlook.
Analyst Commentary
- Bearish analysts flag downside risks to iron ore prices, particularly in the months ahead, impacting Rio Tinto’s earnings outlook.
- Cautious sentiment is driven by a lack of clear economic stimulus from China, which is viewed as crucial for supporting iron ore demand.
- Several analysts have lowered earnings estimates for 2025-27 by approximately 5%, reflecting a more conservative approach to commodity pricing.
- Despite downgrades, some maintain a preference for Rio Tinto among iron ore producers and acknowledge consistent operational performance.
- Bullish analysts highlight Rio Tinto’s relative sector strength, with selective modest price target increases, but generally trim targets to reflect more cautious near-term market conditions.
What's in the News
- Rio Tinto approved a USD 180 million investment to develop the Norman Creek region at the Amrun bauxite mine, with first production targeted for 2027, and also began feasibility work on the Kangwinan project, aiming to increase bauxite capacity.
- Announced a joint venture with ENAMI to develop the Salares Altoandinos lithium project in the Atacama region, acquiring a 51% interest and providing up to $425 million in funding and technology, with closing expected in 2026 pending approvals.
- Reported H1 2025 production: Pilbara iron ore shipments of 150.6 Mt, bauxite 30.6 Mt, alumina 3.7 Mt, aluminium 1.7 Mt, copper 438 kt, titanium dioxide slag 0.5 Mt, iron ore pellets/concentrate 4.8 Mt, boric oxide equivalent 0.2 Mt; reaffirmed full-year 2025 production guidance across all product segments.
- Announced a 2025 interim dividend of 148 US cents per share to be paid in September.
- Simon Trott appointed CEO effective 25 August 2025, succeeding Jakob Stausholm; interim support for the Iron Ore Chief Executive role provided by Matt Holcz.
Valuation Changes
Summary of Valuation Changes for Rio Tinto Group
- The Consensus Analyst Price Target remained effectively unchanged, moving only marginally from £51.63 to £51.49.
- The Future P/E for Rio Tinto Group has significantly fallen from 12.98x to 9.77x.
- The Consensus Revenue Growth forecasts for Rio Tinto Group has significantly fallen from 2.1% per annum to 1.9% per annum.
Disclaimer
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