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Rio Tinto
(NYSE:RIO)
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Rating:69Neutral
Price Target:
$116.00
▲(15.83% Upside)
Action:Downgraded
Date:02/21/26
The score is driven mainly by solid but mixed financial performance—strong profitability and a sturdy balance sheet offset by sharply weaker free cash flow and higher 2025 debt. Technicals are supportive with a clear uptrend and positive momentum indicators. Valuation is reasonable with a supportive dividend, while the earnings call adds a modest positive tilt on cost/capital discipline and project progress, tempered by the Simandou safety incident and near-term operational headwinds.
Positive Factors
Copper project ramp and production growth
Rio Tinto’s copper franchise is structurally stronger after a material ramp at Oyu Tolgoi and a doubling of copper EBITDA. Sustained ~500k tpa OT guidance and higher copper exposure diversify revenue away from iron ore cyclicality, supporting longer-term cash generation tied to energy-transition metals.
Negative Factors
Step-up in total debt
A material increase in total debt in 2025 reduces cushion versus cyclical revenue volatility. Higher absolute borrowings raise refinancing and interest-cost risk, constraining flexibility for growth or buybacks in a downside scenario and requiring close monitoring of deleveraging progress.
Read all positive and negative factors
Positive Factors
Negative Factors
Copper project ramp and production growth
Rio Tinto’s copper franchise is structurally stronger after a material ramp at Oyu Tolgoi and a doubling of copper EBITDA. Sustained ~500k tpa OT guidance and higher copper exposure diversify revenue away from iron ore cyclicality, supporting longer-term cash generation tied to energy-transition metals.
Read all positive factors
Rio Tinto (RIO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$162.16B
Dividend Yield4.6%
Average Volume (3M)2.65M
Price to Earnings (P/E)15.3
Beta (1Y)0.86
Revenue Growth7.59%
EPS Growth-13.66%
CountryUS
Employees57,271
SectorBasic Materials
Sector Strength58
IndustryIndustrial Materials
Share Statistics
EPS (TTM)6.14
Shares Outstanding1,255,069,200
10 Day Avg. Volume2,890,943
30 Day Avg. Volume2,648,153
Financial Highlights & Ratios
PEG Ratio-0.96
Price to Book (P/B)2.09
Price to Sales (P/S)2.25
P/FCF Ratio26.95
Enterprise Value/Market Cap1.14
Enterprise Value/Revenue3.20
Enterprise Value/Gross Profit12.71
Enterprise Value/Ebitda8.98
Forecast
1Y Price Target
$113.17Price Target Upside13.00% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
EPS Forecast (FY)8.51
Revenue Forecast (FY)$64.31B
Rio Tinto Business Overview & Revenue Model
Company Description
Rio Tinto Group engages in exploring, mining, and processing mineral resources worldwide. The company operates through Iron Ore; Aluminium and lithium; and Copper segments. The Iron Ore segment engages in the iron ore mining, and salt and gypsum p...
How the Company Makes Money
Rio Tinto primarily makes money by producing and selling mined commodities and processed metals to customers under a mix of spot-linked, index-priced, and longer-term supply arrangements. Its largest revenue driver is typically iron ore: it mines ...
Rio Tinto Earnings Call Summary
Earnings Call Date:Feb 19, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Jul 29, 2026
Earnings Call Sentiment Positive
The call presented a predominantly positive operational and financial story: strong production growth (8% copper-equivalent), record outputs, a 9% increase in underlying EBITDA to $25.4 billion, major progress on strategic projects (OT, Simandou, lithium), and a clear productivity program unlocking a $650 million run rate with expectations of materially higher cash delivery in 2026. Management reaffirmed disciplined capital allocation and returned $6.5 billion to shareholders. Offsetting these positives were a fatal safety incident at Simandou with an operational pause and investigation, iron ore earnings pressure and near-term headwinds (Pilbara cyclone impacts, modest 2026 volume growth of ~3%), and a rise in net debt to $14.4 billion after an acquisition. On balance, the highlights—growth, improved margins in copper and aluminum, strong cash returns and project progress—outweigh the lowlights, though the Simandou safety issue and certain commodity/operational headwinds remain material risks.Positive Updates
Production Growth and Record Output
Copper-equivalent production rose 8% year-on-year, with annual records set for both copper and bauxite. Pilbara mines rebounded after cyclones and set production records from April.
Negative Updates
Fatal Safety Incident at Simandou and Operational Pause
A colleague died at the Simandou mine site; all site works and construction activities were paused, an independent internal/external investigation launched and an independent safety advisory panel to be appointed. Management flagged safety improvement work is required to safely operate in that jurisdiction.
Read all updates
Q4-2025 Updates
Positive
Negative
Production Growth and Record Output
Copper-equivalent production rose 8% year-on-year, with annual records set for both copper and bauxite. Pilbara mines rebounded after cyclones and set production records from April.
Read all positive updates
Company Guidance
Management guided that 2026 will focus on delivering stronger, structural cost reductions and disciplined capital allocation, with specific targets and metrics including: volume growth of around 3% across managed operations in 2026 (after 8% copper‑equivalent growth in 2025), a copper‑equivalent CAGR target of ~3% to the end of the decade, iron‑ore unit cost guidance of $23.50–$25/t for 2026, CapEx of up to ~$11bn for the next two years before stepping down to ~$10bn thereafter, and continued capital returns (60% payout of underlying earnings — 2025 underlying earnings $10.9bn => $6.5bn dividend). They reaffirmed productivity delivery of a $650m annualized run rate by end‑Q1 with 2026 cash improvements “materially above” that run rate, a $5–$10bn target for capital release proceeds, lithium capacity targeting ~200,000 tpa by 2028, Oyu Tolgoi average production ~500,000 tpa Cu (2028–2036), Simandou 60 Mtpa iron ore, 2025 underlying EBITDA $25.4bn (iron ore EBITDA $15.2bn; copper EBITDA $7.4bn), net debt ~$14.4bn (gearing ~18%), and stated unit‑cost improvements in 2025 of a 5% copper‑equivalent reduction (OT shipments +60%; OT unit costs down 53%), with volumes and unit‑cost moves driving a ~$2.9bn sales uplift and ~$800m unit‑cost benefit.Rio Tinto Financial Statement Overview
Summary
Income Statement
63
Positive
Balance Sheet
72
Positive
Cash Flow
58
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 57.77B | 53.66B | 54.04B | 55.55B | 63.49B |
| Gross Profit | 16.21B | 30.28B | 17.30B | 34.27B | 44.93B |
| EBITDA | 21.11B | 19.06B | 20.38B | 24.76B | 35.08B |
| Net Income | 9.99B | 11.55B | 10.06B | 12.39B | 21.11B |
Balance Sheet | |||||
| Total Assets | 128.10B | 102.79B | 103.55B | 96.74B | 102.90B |
| Cash, Cash Equivalents and Short-Term Investments | 9.45B | 7.20B | 10.79B | 8.94B | 15.35B |
| Total Debt | 23.52B | 13.86B | 14.35B | 12.27B | 13.53B |
| Total Liabilities | 61.08B | 44.82B | 47.21B | 44.47B | 46.31B |
| Stockholders Equity | 62.20B | 55.25B | 54.59B | 50.17B | 51.43B |
Cash Flow | |||||
| Free Cash Flow | 4.82B | 5.98B | 8.07B | 9.38B | 17.96B |
| Operating Cash Flow | 17.19B | 15.60B | 15.16B | 16.13B | 25.34B |
| Investing Cash Flow | -17.75B | -9.59B | -6.96B | -6.71B | -7.16B |
| Financing Cash Flow | 848.98M | -7.09B | -5.28B | -15.47B | -15.86B |
Rio Tinto Technical Analysis
Negative
100.15
Price Trends
102.22
Negative
97.75
Negative
85.31
Positive
Market Momentum
-2.64
Positive
35.71
Neutral
11.14
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RIO, the sentiment is Negative. The current price of 100.15 is above the 20-day moving average (MA) of 99.96, below the 50-day MA of 102.22, and above the 200-day MA of 85.31, indicating a neutral trend. The MACD of -2.64 indicates Positive momentum. The RSI at 35.71 is Neutral, neither overbought nor oversold. The STOCH value of 11.14 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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
1.
Being responsible operators throughout the entire life ofour assets – from discovery to closure Q4, 2024
2.
Preventing loss of operational control that may lead to potential fatalities, permanent disablements, or material production disruption Q4, 2024
3.
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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $209.93B | 19.96 | 21.41% | 3.55% | 1.04% | -9.88% | |
69 Neutral | $162.16B | 15.32 | 16.59% | 4.60% | 7.59% | -13.66% | |
69 Neutral | $1.59B | 7.63 | 20.95% | 1.14% | 16.41% | ― | |
66 Neutral | $62.23B | 21.91 | 7.68% | 10.04% | 4.64% | -51.66% | |
63 Neutral | $5.90B | 76.84 | 8.17% | 0.43% | 11.39% | 651.28% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
51 Neutral | $9.66B | -128.69 | -3.49% | ― | 60.93% | 34.20% |
* Basic Materials Sector Average
RIO
Rio Tinto
94.42
38.35
68.39%
BHP
BHP Group
83.33
34.83
71.83%
MTRN
Materion
265.43
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211.37%
VALE
Vale SA
14.99
5.51
58.17%
NEXA
Nexa Resources SA
13.04
8.10
163.97%
MP
MP Materials
53.31
21.47
67.43%
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.