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Rio Tinto Plc (RIO)
NYSE:RIO
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Rio Tinto
(NYSE:RIO)
Rating:73Outperform
Price Target:
$67.00
▲( 8.80% Upside)
Rio Tinto (RIO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$105.57B
Dividend Yield6.49%
Average Volume (3M)2.71M
Price to Earnings (P/E)8.7
Beta (1Y)0.74
Revenue Growth-0.81%
EPS Growth14.59%
CountryUS
Employees60,000
SectorBasic Materials
Sector Strength64
IndustryIndustrial Materials
Share Statistics
EPS (TTM)3.15
Shares Outstanding1,254,028,800
10 Day Avg. Volume2,552,535
30 Day Avg. Volume2,708,767
Financial Highlights & Ratios
PEG Ratio1.09
Price to Book (P/B)1.79
Price to Sales (P/S)0.00
P/FCF Ratio16.59
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$76.75Price Target Upside24.63% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
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 makes money primarily through the extraction, processing, and sale of minerals and metals. The company's revenue model is centered around several key products, including iron ore, aluminum, and copper, which are among the most significant contributors to its earnings. Iron ore, in particular, is a major revenue driver due to its use in steel production, with Rio Tinto benefiting from its extensive mining operations in the Pilbara region of Western Australia. The company also generates revenue from aluminum production, supported by its vertically integrated business model encompassing bauxite mining, alumina refining, and aluminum smelting. Copper is another vital revenue stream, with operations in key mining regions such as Chile and the United States. Additionally, Rio Tinto's strategic partnerships and joint ventures, such as those with Chinese companies, enhance its market presence and contribute to its financial performance. The company is also focused on sustainable and responsible mining practices, aiming to create value for its shareholders while adhering to environmental and social governance standards.
Rio Tinto Financial Statement Overview
Summary
Rio Tinto's financials indicate a stable outlook with strong profitability margins and a robust balance sheet. The company faces challenges in revenue growth and cash flow conversion, yet its operational efficiency and capital structure remain commendable.Income Statement
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.75
Positive
Balance Sheet
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.82
Very Positive
Cash Flow
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.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 53.66B | 54.04B | 55.55B | 63.49B | 44.61B | Gross Profit |
| 30.28B | 17.30B | 34.27B | 44.93B | 29.13B | EBIT |
| 15.65B | 14.82B | 19.93B | 29.82B | 16.83B | EBITDA |
| 22.31B | 20.38B | 24.76B | 35.08B | 19.66B | Net Income Common Stockholders |
| 11.55B | 10.06B | 12.39B | 21.11B | 9.77B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 7.20B | 10.79B | 8.94B | 15.35B | 13.23B | Total Assets |
| 102.79B | 103.55B | 96.74B | 102.90B | 97.39B | Total Debt |
| 13.86B | 14.35B | 12.27B | 13.53B | 14.02B | Net Debt |
| 7.03B | 4.68B | 5.50B | 724.00M | 3.63B | Total Liabilities |
| 44.82B | 47.21B | 44.47B | 46.31B | 45.49B | Stockholders Equity |
| 55.25B | 54.59B | 50.17B | 51.43B | 47.05B |
| Cash Flow | Free Cash Flow | |||
| 5.98B | 8.07B | 9.38B | 17.96B | 9.69B | Operating Cash Flow |
| 15.60B | 15.16B | 16.13B | 25.34B | 15.88B | Investing Cash Flow |
| -9.59B | -6.96B | -6.71B | -7.16B | -6.56B | Financing Cash Flow |
| -7.09B | -5.28B | -15.47B | -15.86B | -7.13B |
Rio Tinto Technical Analysis
Positive
61.58
Price Trends
60.13
Positive
59.71
Positive
60.58
Positive
Market Momentum
0.69
Negative
54.94
Neutral
37.44
Neutral
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 61.58 is above the 20-day moving average (MA) of 60.92, above the 50-day MA of 60.13, and above the 200-day MA of 60.58, indicating a bullish trend. The MACD of 0.69 indicates Negative momentum. The RSI at 54.94 is Neutral, neither overbought nor oversold. The STOCH value of 37.44 is Neutral, 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 5 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 0 New Risks
Rio Tinto Peers Comparison
Overall Rating
UnderperformOutperform
Sector (50)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $126.42B | 11.14 | 26.13% | 4.91% | -3.15% | 54.08% | |
73 Outperform | $105.57B | 8.65 | 20.93% | 6.49% | -0.81% | 14.59% | |
72 Outperform | $41.06B | 7.06 | 15.98% | 7.78% | -9.59% | -25.35% | |
63 Neutral | $1.60B | 163.59 | 1.14% | 0.70% | 6.97% | -87.87% | |
58 Neutral | $664.84M | ― | -16.64% | ― | 12.30% | 42.72% | |
56 Neutral | $3.22B | ― | -9.62% | ― | 4.63% | -3189.81% | |
50 Neutral | $1.99B | -1.06 | -21.34% | 3.71% | 2.03% | -30.65% |
* Basic Materials Sector Average
Performance Comparison
RIO
Rio Tinto
61.58
-4.88
-7.34%
BHP
BHP Group
49.89
-6.96
-12.24%
MTRN
Materion
76.69
-36.94
-32.51%
VALE
Vale SA
9.60
-1.86
-16.23%
NEXA
Nexa Resources SA
5.02
-2.87
-36.38%
MP
MP Materials
19.69
2.99
17.90%
Rio Tinto Earnings Call Summary
Earnings Call Date:Feb 19, 2025
(Q4-2024)
| % Change Since: -0.58%|
Next Earnings Date:Jul 30, 2025
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.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.