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Rio Tinto
(NYSE:RIO)
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Rating:63Neutral
Price Target:
$98.00
▲(7.43% Upside)
Action:Reiterated
Date:07/29/26
The score is driven primarily by solid but cyclical financial performance: good profitability and a generally sturdy balance sheet are tempered by materially weaker free cash flow and a meaningful rise in debt in 2025. Technicals are mixed (below the 50/100-day averages but above the 200-day), while valuation is supportive with a moderate P/E and strong dividend yield. The earnings call adds a positive boost due to strong H1 EBITDA/FCF growth and productivity outperformance, though operational and contingent risks warrant monitoring.
Positive Factors
Productivity program execution
A multi-year productivity program that has already banked $870m and targets a $1.8bn run‑rate materially strengthens structural cost competitiveness. Sustained savings improve margins, cushion commodity cycles, fund growth and dividends, and increase free cash generation over the medium term.
Negative Factors
Rising leverage in 2025
A sharp increase in reported total debt reduces balance-sheet flexibility and raises interest‑sensitivity. Higher leverage constrains headroom for further M&A or cash returns during downturns, and increases the importance of consistent FCF to preserve credit metrics and investment-grade rating.
Read all positive and negative factors
Positive Factors
Negative Factors
Productivity program execution
A multi-year productivity program that has already banked $870m and targets a $1.8bn run‑rate materially strengthens structural cost competitiveness. Sustained savings improve margins, cushion commodity cycles, fund growth and dividends, and increase free cash generation over the medium term.
Read all positive factors
Rio Tinto (RIO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$160.85B
Dividend Yield4.14%
Average Volume (3M)2.73M
Price to Earnings (P/E)14.8
Beta (1Y)0.82
Revenue Growth14.26%
EPS Growth17.02%
CountryUS
Employees57,271
SectorBasic Materials
Sector Strength58
IndustryIndustrial Materials
Share Statistics
EPS (TTM)7.43
Shares Outstanding1,255,046,300
10 Day Avg. Volume2,914,695
30 Day Avg. Volume2,731,440
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 Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$125.80Price Target Upside37.91% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)8.25
Revenue Forecast (FY)$64.37B
Rio Tinto Business Overview & Revenue Model
Company Description
Rio Tinto (RIO) is a global diversified mining and metals company that explores for, mines, and processes mineral resources, with major operations spanning iron ore, aluminum (bauxite, alumina, and aluminum), copper, and other minerals. The compan...
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:Jul 29, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Feb 24, 2027
Earnings Call Sentiment Positive
The call presented a strongly positive operational and financial half: material EBITDA and free cash flow growth, significant productivity outperformance (banked $870m and targeting $1.8bn run rate), clear progress on major growth projects (Simandou, OT ramp, lithium deliveries) and continued capital discipline with options to release cash. Notable negatives include safety-related fatalities, localized operational disruptions (IOC, Kennecott), a furnace breach shifting some metal sales into 2027, external cost headwinds (~$1.5bn), and an unresolved Mongolia tax dispute (~$900m exposure). On balance the positive financial and execution items materially outweigh these issues, though several operational and contingent risks merit monitoring.Positive Updates
Strong Financial Performance
Underlying EBITDA increased 28% to $14.8 billion; free cash flow rose 75%; interim dividend increased 43% to $3.4 billion. Copper product group EBITDA rose 84% and aluminum EBITDA rose 31%, supporting materially stronger cash generation while net debt was reduced during the period.
Negative Updates
Workplace Fatalities and Safety Concerns
The company reported two colleague fatalities during the half and emphasized safety as its top priority, noting that safety incidents weigh heavily on leadership and operational focus.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Financial Performance
Underlying EBITDA increased 28% to $14.8 billion; free cash flow rose 75%; interim dividend increased 43% to $3.4 billion. Copper product group EBITDA rose 84% and aluminum EBITDA rose 31%, supporting materially stronger cash generation while net debt was reduced during the period.
Read all positive updates
Company Guidance
The guidance emphasized sustained momentum and disciplined capital allocation: H1 underlying EBITDA rose 28% to $14.8bn and free cash flow was up 75%, enabling a $3.4bn interim dividend (50% payout, 43% uplift) after funding ~$5bn of CapEx and paying the $4.2bn 2025 final dividend while reducing net debt; the company has banked $870m of productivity benefits to June and is targeting a year‑end run‑rate of $1.8bn (vs the $650m CMD target) with controllables contributing ~$1.2bn and commodity prices adding $3.6bn (c.$2.0bn copper; $1.3bn aluminium) offsetting $1.5bn of external headwinds. Management reiterated CapEx guidance of up to $11bn in 2026–27 before easing to ~$10bn pa (real ’25 terms) from 2028, sustaining capital ~ $4bn pa (replacement/decarbonisation ~ $7–8bn pa), growth capital ~ $1bn pa on lithium/SIMANDOU completion, and a target to release up to $5bn of cash this year (pipeline >$10bn). Operational and growth targets include copper equivalent production +3% in H1 and a 3% CAGR to 2030 targeting 1Mt copper by 2030 (OT ~500ktpa; Kennecott targeting 40–50% growth), lithium 200kt capacity by 2028, Simandou >¾ complete and on track for end‑2027, a portfolio IRR ~26%, and a 4% CAGR reduction in unit costs to 2030.Rio Tinto Financial Statement Overview
Summary
Income Statement
63
Positive
Balance Sheet
72
Positive
Cash Flow
58
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 61.67B | 57.77B | 53.66B | 54.04B | 55.55B | 63.49B |
| Gross Profit | 16.46B | 16.21B | 30.28B | 17.30B | 34.27B | 44.93B |
| EBITDA | 23.35B | 21.11B | 19.06B | 20.38B | 24.76B | 35.08B |
| Net Income | 12.08B | 9.99B | 11.55B | 10.06B | 12.39B | 21.11B |
Balance Sheet | ||||||
| Total Assets | 133.50B | 128.10B | 102.79B | 103.55B | 96.74B | 102.90B |
| Cash, Cash Equivalents and Short-Term Investments | 9.51B | 9.45B | 7.20B | 10.75B | 8.94B | 15.35B |
| Total Debt | 22.85B | 23.52B | 13.86B | 14.35B | 12.27B | 13.53B |
| Total Liabilities | 61.80B | 61.08B | 44.82B | 47.21B | 44.47B | 46.31B |
| Stockholders Equity | 65.46B | 62.20B | 55.25B | 54.59B | 50.17B | 51.43B |
Cash Flow | ||||||
| Free Cash Flow | 5.76B | 4.82B | 5.98B | 8.07B | 9.38B | 17.96B |
| Operating Cash Flow | 19.22B | 17.19B | 15.60B | 15.16B | 16.13B | 25.34B |
| Investing Cash Flow | -11.47B | -17.75B | -9.59B | -6.96B | -6.71B | -7.16B |
| Financing Cash Flow | -7.82B | 848.98M | -7.09B | -5.28B | -15.47B | -15.86B |
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 | $214.69B | 20.43 | 21.41% | 3.18% | 1.04% | -9.88% | |
69 Neutral | $1.61B | 7.83 | 20.95% | 0.79% | 16.41% | ― | |
66 Neutral | $61.60B | 21.62 | 7.68% | 5.23% | 4.64% | -51.66% | |
63 Neutral | $160.85B | 14.84 | 16.59% | 4.41% | 14.26% | 17.02% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
58 Neutral | $3.94B | 56.83 | 8.17% | 0.23% | 11.39% | 651.28% | |
47 Neutral | $6.78B | -97.87 | -3.49% | ― | 60.93% | 34.20% |
* Basic Materials Sector Average
RIO
Rio Tinto
97.18
40.51
71.48%
BHP
BHP Group
85.90
37.20
76.39%
MTRN
Materion
208.11
103.46
98.87%
VALE
Vale SA
14.99
5.99
66.48%
NEXA
Nexa Resources SA
13.16
8.54
184.73%
MP
MP Materials
41.66
-22.03
-34.59%
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.