Rio Tinto (RIO) AI Stock Analysis

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Rio Tinto

(NYSE:RIO)

Rating:75Outperform

Price Target:

$67.00

▲(9.30% Upside)

Rio Tinto's overall stock score is driven by its strong financial performance and attractive valuation. The company's strategic focus on growth in aluminum and copper, along with its commitment to decarbonization, supports a positive outlook. Technical indicators suggest moderate bullish momentum, while earnings call insights highlight resilience despite some operational challenges.

Rio Tinto (RIO) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$102.71B

Dividend Yield6.15%

Average Volume (3M)3.56M

Price to Earnings (P/E)9.5

Beta (1Y)0.70

Revenue Growth0.03%

EPS Growth-3.78%

CountryUS

Employees60,000

SectorBasic Materials

Sector Strength56

IndustryIndustrial Materials

Share Statistics

EPS (TTM)2.96

Shares Outstanding1,254,156,100

10 Day Avg. Volume3,116,688

30 Day Avg. Volume3,564,404

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)0.00

Price to Sales (P/S)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap1.11

Enterprise Value/Revenue2.11

Enterprise Value/Gross Profit7.98

Enterprise Value/Ebitda6.14

Forecast

1Y Price Target

$63.00

Price Target Upside2.77% Upside

Rating ConsensusHold

Number of Analyst Covering4

Rio Tinto Business Overview & Revenue Model

Company DescriptionRio Tinto Group engages in exploring, mining, and processing mineral resources worldwide. The company operates through Iron Ore, Aluminium, Copper, and Minerals Segments. The Iron Ore segment engages in the iron ore mining, and salt and gypsum production in Western Australia. The Aluminum segment is involved in bauxite mining; alumina refining; and aluminium smelting. The Copper segment engages in mining and refining of copper, gold, silver, molybdenum, and other by-products and exploration activities. The Minerals segment is involved in mining and processing of borates, titanium dioxide feedstock, and iron concentrate and pellets; diamond mining, sorting, and marketing; and development projects for battery materials, such as lithium. It also owns and operates open pit and underground mines; and refineries, smelters, processing plants and power, and shipping facilities. Rio Tinto Group was founded in 1873 and is headquartered in London, the United Kingdom.

How the Company Makes MoneyRio Tinto generates revenue primarily through the extraction and sale of minerals and metals. Its key revenue streams include the production and sale of iron ore, which is a significant contributor to its overall earnings, along with aluminum, copper, and diamonds. The company sells its products to various sectors, including construction, automotive, and electronics. Additionally, Rio Tinto benefits from long-term supply contracts and strategic partnerships with major customers in these industries. Market prices for commodities heavily influence its revenue, and the company employs rigorous cost management and operational efficiency to enhance profitability. Factors such as global demand for minerals, changes in commodity prices, and its ability to maintain a sustainable supply chain also significantly impact its financial performance.

Rio Tinto Earnings Call Summary

Earnings Call Date:Jul 30, 2025

(Q4-2024)

% Change Since: 0.82%|

Next Earnings Date:Mar 04, 2026

Earnings Call Sentiment Neutral

The earnings call highlighted steady financial performance and growth prospects, particularly in aluminum and copper, alongside impressive shareholder returns and decarbonization progress. However, challenges remain with weather impacts on iron ore production and pricing, as well as operational issues in certain segments. The sentiment is cautiously optimistic with a focus on strategic growth and resilience.

Q4-2024 Updates

Positive Updates

Consistent Shareholder Returns

For the ninth consecutive year, the company has paid ordinary dividends at the top end of the range, equating to $6.5 billion, maintaining a 60% payout ratio.

Resilient Financial Performance

Operating cash flow increased by 3% with a 67% EBITDA cash conversion rate, even with an 11% drop in iron ore prices.

Positive Growth Outlook

Copper equivalent production increased by 1% in 2024, with guidance for another 4% growth led by the ramp-up of Oyu Tolgoi, excluding Arcadium Lithium acquisition.

Strong Performance in Aluminum and Copper

Aluminum and copper divisions showed rising contributions, with aluminum performance particularly strong, leading to a 61% increase in product group EBITDA.

Significant Progress in Decarbonization

Emissions reduced by 14% from 2018 to 2024, with significant project approvals advancing towards a 50% reduction target by 2030.

Negative Updates

Impact of Weather on Iron Ore

Cyclones and unusual high rainfall in the Pilbara impacted production, with first quarter production affected, but full-year shipment guidance remains unchanged.

Iron Ore Pricing Challenges

Despite strong realized pricing, the iron ore segment faced challenges due to an 11% price drop, impacting overall EBITDA.

Operational Stability Issues

IOC (Iron Ore Company of Canada) has not yet achieved the operational stability the company is striving for.

TiO2 Market Weakness

TiO2 volumes reflected weak Western market conditions for pigment, affecting the Minerals segment performance.

Company Guidance

In the call, guidance for 2024 highlighted several key metrics and strategic achievements. Copper equivalent production grew by 1% in 2024, with a mid-range guidance predicting a 4% increase this year, driven by the Oyu Tolgoi ramp-up. The company anticipates a decade of 3% compound annual production growth, focusing on strategic investments in copper, aluminum, and lithium. Underlying EBITDA was slightly down by 2% to $23.3 billion, despite an 11% drop in iron ore prices, offset by increased contributions from aluminum and copper. Operating cash flow grew by 3%, with an EBITDA cash conversion rate rising to 67%. Capital investment reached $9.5 billion, ending the year with net debt of $5.5 billion. The company maintained a 60% ordinary dividend payout, equating to $6.5 billion. Moreover, the business achieved a record emission reduction, cutting emissions by 14% from 2018 to 2024, targeting a 50% reduction by 2030. Overall, the guidance reflects Rio Tinto's focus on operational improvements, strategic growth, and consistent shareholder returns.

Rio Tinto Financial Statement Overview

Summary

Rio Tinto's financials show strong profitability with high margins and a solid balance sheet. Challenges include declining revenue growth and reduced cash flow conversion, but operational efficiency remains a strength.

Income Statement

Positive

Rio Tinto has shown a mixed performance in its recent income statements. The Gross Profit Margin improved in 2024, reaching 56.43% from 32.01% in 2023, indicating better cost management. However, the Net Profit Margin saw a slight decline from 18.61% in 2023 to 21.53% in 2024. The Revenue Growth Rate was negative at -0.71% from 2023 to 2024, showing a slight contraction in sales. Despite these challenges, EBIT and EBITDA margins remain strong at 29.17% and 43.16% respectively, showcasing operational efficiency.

Balance Sheet

Very Positive

Rio Tinto maintains a solid balance sheet with a healthy Equity Ratio of 53.73% in 2024, reflecting strong capitalization. The Debt-to-Equity Ratio improved to 0.25 from 0.26, indicating effective management of liabilities. Return on Equity is robust at 20.91%, a slight increase from 18.43% in 2023, highlighting the company's ability to generate returns for its shareholders.

Cash Flow

Positive

The cash flow position of Rio Tinto shows some areas of concern. Free Cash Flow decreased by 25.95% from 2023 to 2024, but operating cash flow remains stable. The Operating Cash Flow to Net Income Ratio is strong at 1.35, indicating good cash generation relative to net profits. However, the Free Cash Flow to Net Income Ratio fell to 0.52, suggesting reduced cash conversion efficiency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	53.96B	53.66B	54.04B	55.55B	63.49B	44.61B
Gross Profit	14.24B	30.28B	17.30B	34.27B	44.93B	29.13B
EBITDA	18.50B	19.06B	20.38B	24.76B	35.08B	19.66B
Net Income	10.25B	11.55B	10.06B	12.39B	21.11B	9.77B
Balance Sheet
Total Assets	120.81B	102.79B	103.55B	96.74B	102.90B	97.39B
Cash, Cash Equivalents and Short-Term Investments	9.33B	7.20B	10.79B	8.94B	15.35B	13.23B
Total Debt	23.64B	13.86B	14.35B	12.27B	13.53B	14.02B
Total Liabilities	58.84B	44.82B	47.21B	44.47B	46.31B	45.49B
Stockholders Equity	58.20B	55.25B	54.59B	50.17B	51.43B	47.05B
Cash Flow
Free Cash Flow	5.20B	5.98B	8.07B	9.38B	17.96B	9.69B
Operating Cash Flow	15.58B	15.60B	15.16B	16.13B	25.34B	15.88B
Investing Cash Flow	-16.58B	-9.59B	-6.96B	-6.71B	-7.16B	-6.56B
Financing Cash Flow	-207.45M	-7.09B	-5.28B	-15.47B	-15.86B	-7.13B

Rio Tinto Technical Analysis

Technical Analysis Sentiment

Positive

Last Price61.30

Price Trends

50DMA

58.76

Positive

100DMA

58.38

Positive

200DMA

58.50

Positive

Market Momentum

MACD

0.55

Negative

RSI

57.51

Neutral

STOCH

17.03

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RIO, the sentiment is Positive. The current price of 61.3 is above the 20-day moving average (MA) of 60.13, above the 50-day MA of 58.76, and above the 200-day MA of 58.50, indicating a bullish trend. The MACD of 0.55 indicates Negative momentum. The RSI at 57.51 is Neutral, neither overbought nor oversold. The STOCH value of 17.03 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RIO.

Rio Tinto Risk Analysis

Rio Tinto disclosed 14 risk factors in its most recent earnings report. Rio Tinto reported the most risks in the "Finance & Corporate" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 3 New Risks

Being responsible operators throughout the entire life ofour assets – from discovery to closure Q4, 2024

Preventing loss of operational control that may lead to potential fatalities, permanent disablements, or material production disruption Q4, 2024

Remaining competitive through economic cycles or shocks by maintaining strong financial and operating performance, underpinned by a healthy inventory of high-quality reserves Q4, 2024

Rio Tinto Peers Comparison

Overall Rating

UnderperformOutperform

Sector (43)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MTRN	78 Outperform	$2.33B	146.83	1.79%	0.50%	5.55%	-79.38%
BHP	76 Outperform	$137.46B	15.13	19.51%	4.60%	-7.68%	14.56%
RIO	75 Outperform	$102.71B	9.54	18.18%	6.15%	0.03%	-3.78%
VALE	74 Outperform	$41.51B	8.06	13.49%	8.25%	-12.89%	-46.86%
MP	63 Neutral	$12.27B	―	-9.57%	―	39.42%	-172.40%
NEXA	50 Neutral	$647.23M	―	-9.63%	2.09%	8.66%	66.06%
Sector *	43 Neutral	C$909.73M	-8.58	0.05%	2.69%	23.40%	-43.48%

* Basic Materials Sector Average

Performance Comparison

RIO

Rio Tinto

61.30

1.91

3.22%

BHP

BHP Group

54.50

1.86

3.53%

MTRN

Materion

109.59

-8.97

-7.57%

VALE

Vale SA

9.81

0.11

1.13%

NEXA

Nexa Resources SA

4.90

-1.56

-24.15%

MP Materials

68.28

55.33

427.26%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 08, 2025