Rio Tinto (LSE:RIO): Assessing Valuation After Recent Share Price Momentum

Rio Tinto Group (LSE:RIO) has quietly added momentum recently, with the share price up about 1% in a day, 2% over the week, and roughly 6% this month, inviting a closer look.

See our latest analysis for Rio Tinto Group.

That recent 1 month share price return of 5.78% builds on a strong 90 day share price gain of 20.58%, while the 1 year total shareholder return of 15.04% signals steady, not explosive, momentum for Rio Tinto at its current £55.28 level.

If Rio Tinto’s move has you thinking about what else might be setting up for the next leg higher, it is a good moment to explore fast growing stocks with high insider ownership.

With Rio Tinto delivering solid returns and trading only modestly below analyst targets, the key question now is whether the miner still offers value upside or if the market has already priced in its future growth potential.

Most Popular Narrative Narrative: 3.2% Undervalued

With Rio Tinto last closing at £55.28 against a narrative fair value around £57.09, the valuation case hinges on specific growth and margin assumptions.

The analysts have a consensus price target of £51.491 for Rio Tinto Group based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of £66.68, and the most bearish reporting a price target of just £41.0.

Read the complete narrative.

Want to see what is driving that tight gap between current price and fair value? The narrative leans on steady revenues, resilient margins, and a richer future earnings multiple. Curious how those pieces fit together and which assumptions really move the dial on Rio Tinto’s valuation story?

Result: Fair Value of $57.09 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent iron ore grade decline, along with elevated geopolitical and regulatory risks, could undermine margins and stall the valuation rerating implied by today’s narrative.

Find out about the key risks to this Rio Tinto Group narrative.

Build Your Own Rio Tinto Group Narrative

If you see Rio Tinto’s story differently, or simply prefer to dig into the numbers yourself, you can build a fresh view in minutes, Do it your way.

A great starting point for your Rio Tinto Group research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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