In a report released yesterday, Jason Fairclough from Bank of America Securities reiterated a Buy rating on Rio Tinto (RIO – Research Report), with a price target of p7,500.00.
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Jason Fairclough has given his Buy rating due to a combination of factors, including Rio Tinto’s solid financial performance and strategic positioning in key commodities. The company reported FY24 results largely in line with expectations, with a strong 60% dividend payout, which was a positive surprise for investors. Although the iron ore division was slightly below expectations, the aluminium segment performed well, and there is potential for growth in copper and lithium.
Moreover, Rio Tinto’s exposure to aluminium and copper aligns with Fairclough’s optimistic outlook on these commodities. The company’s strategic investments in copper, particularly in the Oyu Tolgoi mine, and its commitment to expanding lithium production are seen as positive moves. Despite the current market negativity towards iron ore, the Pilbara business remains profitable, providing strong cash flow to support other investments. The valuation with a price objective of 7,500 GBp suggests potential upside, reinforcing the Buy recommendation.
In another report released today, Barclays also maintained a Buy rating on the stock with a £63.00 price target.
RIO’s price has also changed slightly for the past six months – from p4824.500 to p5036.000, which is a 4.38% increase.