Rio Tinto Group Valuation

Is RIO undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

6/6

Valuation Score 6/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of RIO when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: RIO (£50.17) is trading below our estimate of fair value (£103.9)

Significantly Below Fair Value: RIO is trading below fair value by more than 20%.


Key Valuation Metric

Which metric is best to use when looking at relative valuation for RIO?

Other financial metrics that can be useful for relative valuation.

RIO key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue2.1x
Enterprise Value/EBITDA5.9x
PEG Ratio4.5x

Price to Earnings Ratio vs Peers

How does RIO's PE Ratio compare to its peers?

The above table shows the PE ratio for RIO vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average35.2x
AAL Anglo American
105.6x30.1%UK£23.7b
FMG Fortescue
8.9x-16.8%AU$79.1b
BHP BHP Group
19.8x14.2%AU$224.4b
VALE3 Vale
6.5x1.3%R$261.6b
RIO Rio Tinto Group
10.2x2.3%UK£86.1b

Price-To-Earnings vs Peers: RIO is good value based on its Price-To-Earnings Ratio (10.2x) compared to the peer average (35.2x).


Price to Earnings Ratio vs Industry

How does RIO's PE Ratio compare vs other companies in the GB Metals and Mining Industry?

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a9.6%
n/an/an/a
No. of CompaniesPE048121620

Fetching data

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a9.6%
n/an/an/a
No more companies

Price-To-Earnings vs Industry: RIO is good value based on its Price-To-Earnings Ratio (10.2x) compared to the UK Metals and Mining industry average (12.3x).


Price to Earnings Ratio vs Fair Ratio

What is RIO's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

RIO PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio10.2x
Fair PE Ratio19x

Price-To-Earnings vs Fair Ratio: RIO is good value based on its Price-To-Earnings Ratio (10.2x) compared to the estimated Fair Price-To-Earnings Ratio (19x).


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst RIO forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUK£50.17
UK£61.08
+21.8%
12.0%UK£79.06UK£44.97n/a19
Mar ’25UK£51.27
UK£62.25
+21.4%
10.3%UK£79.14UK£50.12n/a19
Feb ’25UK£54.87
UK£63.29
+15.3%
10.6%UK£79.58UK£50.84n/a20
Jan ’25UK£58.42
UK£61.42
+5.1%
11.6%UK£79.63UK£51.22n/a19
Dec ’24UK£55.99
UK£58.49
+4.5%
13.1%UK£79.41UK£48.43n/a19
Nov ’24UK£52.62
UK£59.02
+12.2%
12.9%UK£77.52UK£44.95n/a19
Oct ’24UK£51.74
UK£60.19
+16.3%
13.6%UK£78.02UK£44.76n/a19
Sep ’24UK£49.73
UK£59.27
+19.2%
13.2%UK£75.13UK£44.92n/a20
Aug ’24UK£50.95
UK£58.82
+15.4%
13.0%UK£74.50UK£45.17n/a20
Jul ’24UK£49.86
UK£58.12
+16.6%
14.3%UK£74.57UK£38.43n/a20
Jun ’24UK£48.86
UK£60.04
+22.9%
14.0%UK£74.53UK£38.38n/a21
May ’24UK£50.49
UK£59.33
+17.5%
13.7%UK£74.76UK£38.35n/a22
Apr ’24UK£54.78
UK£58.78
+7.3%
13.6%UK£73.34UK£38.42n/a22
Mar ’24UK£59.72
UK£60.34
+1.0%
13.8%UK£75.28UK£37.41UK£51.2723
Feb ’24UK£62.02
UK£59.44
-4.2%
14.2%UK£74.87UK£37.08UK£54.8723
Jan ’24UK£57.98
UK£54.45
-6.1%
14.3%UK£68.11UK£37.06UK£58.4223
Dec ’23UK£55.98
UK£52.66
-5.9%
14.8%UK£67.25UK£37.43UK£55.9923
Nov ’23UK£47.35
UK£54.58
+15.3%
15.4%UK£68.81UK£38.43UK£52.6223
Oct ’23UK£48.96
UK£57.67
+17.8%
14.8%UK£74.02UK£39.83UK£51.7423
Sep ’23UK£46.08
UK£56.98
+23.7%
13.9%UK£71.05UK£42.86UK£49.7323
Aug ’23UK£48.65
UK£55.81
+14.7%
16.2%UK£81.55UK£40.61UK£50.9523
Jul ’23UK£48.35
UK£62.78
+29.9%
14.8%UK£81.58UK£40.63UK£49.8623
Jun ’23UK£57.58
UK£63.22
+9.8%
14.4%UK£79.56UK£45.72UK£48.8623
May ’23UK£57.06
UK£64.84
+13.6%
11.7%UK£78.98UK£48.19UK£50.4923
Apr ’23UK£62.25
UK£59.34
-4.7%
12.6%UK£71.08UK£45.49UK£54.7823
Mar ’23UK£59.19
UK£55.71
-5.9%
14.7%UK£69.19UK£40.23UK£59.7222

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.


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