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Rio Tinto Plc (RIO)
NYSE:RIO
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Rio Tinto
(NYSE:RIO)
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Rating:69Neutral
Price Target:
$105.00
▲(7.02% Upside)
Action:DowngradedDate: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
Production growth and copper ramp
Sustained production growth and the Oyu Tolgoi ramp (shipments +60%) strengthen long-term supply capacity in copper and bauxite, supporting durable revenue and EBITDA. Higher scale reduces unit costs and underpins positioning in energy-transition metals over the coming years.
Productivity and unit-cost improvements
A structured productivity program delivering a $650m run rate and meaningful unit-cost reductions is a durable margin lever. Recurring cost savings improve cash conversion and make earnings more resilient across commodity cycles, strengthening long-term operational competitiveness.
Diversified portfolio and healthy operating cash flow
Consistent, high operating cash flow that exceeds net income signals quality earnings and strong cash generation across a diversified asset base. This durable cash production supports capex for high‑grade projects, dividend policy, and strategic optionality into lithium and other growth areas.
Negative Factors
Free cash flow decline
A marked fall in free cash flow versus prior peaks indicates heavier reinvestment and working-capital or headwind pressure. Lower FCF relative to earnings reduces financial flexibility to sustain buybacks, faster deleveraging or incremental project funding if commodity prices or cash generation soften.
Step-up in debt after acquisition
A sizeable jump in total debt following acquisition increases leverage and interest exposure. Even with modest gearing metrics, the added debt narrows balance-sheet flexibility, raising the importance of steady cash generation and complicating capital allocation if macro or commodity conditions deteriorate.
Safety incident and Simandou pause
A fatality and operational pause at Simandou create material execution, regulatory and reputational risk for a major growth asset. Delays or additional safety controls can push timelines and costs for the 60 Mtpa target, reducing expected long-term supply and near‑term cash flow from the project.
Rio Tinto (RIO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$164.82B
Dividend Yield4.6%
Average Volume (3M)3.89M
Price to Earnings (P/E)15.9
Beta (1Y)0.67
Revenue Growth-0.44%
EPS Growth-4.20%
CountryUS
Employees60,000
SectorBasic Materials
Sector Strength58
IndustryIndustrial Materials
Share Statistics
EPS (TTM)3.81
Shares Outstanding1,254,475,500
10 Day Avg. Volume3,095,944
30 Day Avg. Volume3,886,456
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 Cap1.06
Enterprise Value/Revenue3.03
Enterprise Value/Gross Profit11.72
Enterprise Value/Ebitda8.13
Forecast
1Y Price Target
$78.37Price Target Upside-20.12% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
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. Key revenue streams include the production of iron ore, which is a significant contributor to its earnings due to high demand from steel manufacturers, especially in Asia. The company also earns revenue from its aluminum, copper, and diamond operations, each contributing to its diversified portfolio. Additionally, Rio Tinto benefits from long-term contracts and spot market sales, allowing it to capitalize on fluctuating commodity prices. Strategic partnerships with governments and other entities, along with effective cost management and operational efficiency, further enhance its profitability. The company's focus on sustainability and innovation also positions it favorably in the market, attracting investments and ensuring compliance with environmental regulations.
Rio Tinto Earnings Call Summary
Earnings Call Date:Feb 19, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Aug 05, 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.Q4-2025 Updates
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.
Underlying EBITDA and Earnings Improvement
Underlying EBITDA increased 9% to $25.4 billion. Underlying earnings were $10.9 billion, enabling a planned shareholder return of 60% or $6.5 billion in dividends.
Copper Outperformance and Oyu Tolgoi Ramp
Copper was a standout: copper EBITDA more than doubled to $7.4 billion. Shipments at Oyu Tolgoi (OT) were up 60% and the OT underground development is complete, targeting ~500,000 tpa of copper on average from 2028–2036. Copper prices finished materially higher (company noted copper ended the year ~44% higher year-on-year on point-in-time measures).
Aluminum and Bauxite Strength
Aluminum delivered a step-change in financial performance with EBITDA up 20% and new production records in smelting and bauxite, aided by stronger markets (aluminum prices cited ~17% higher year-on-year on point-in-time measures).
Productivity Program and Unit Cost Reductions
Company unlocked a $650 million annualized productivity run rate and expects to achieve it by end of the quarter; 2026 cash delivery expected materially above that Q1 run rate. Copper-equivalent unit costs fell ~5%, and an $800 million unit-cost improvement was noted versus the prior year.
Progress on Growth Projects (Simandou, Lithium)
First shipment of high-quality iron ore from Simandou received in December; Simandou is nearly two-thirds complete and targeted to deliver 60 Mtpa once fully ramped. Lithium in‑flight projects continue, targeting ~200,000 tpa capacity by 2028, with ~ $1+ billion capex in lithium in 2025.
Capital Discipline, Cash Generation and Balance Sheet Position
CapEx at the high end of guidance (~$11 billion in 2025) reflecting peak growth spend. Management reiterated disciplined capital allocation, targeting $5–10 billion of potential cash proceeds from asset monetization and confirming commitment to a capital return policy. Gearing remains modest at ~18%.
Market Dynamics Supporting Portfolio
Company highlighted favorable energy-transition-driven demand: copper and aluminum markets strengthened; lithium markets moved into balance earlier than expected; battery storage demand accelerating and supporting long-term commodity fundamentals.
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.
Iron Ore Earnings Pressure and Market Headwinds
Iron ore EBITDA was reported at $15.2 billion but was down 11% in the two-year comparison and the product faced headwinds; guidance for Pilbara unit costs is $23.50–$25.00/tonne for 2026 (noting FX impacts).
Net Debt Increase Following Acquisition
Net debt rose to $14.4 billion following completion of the Arcadium acquisition, though management said metrics remain consistent with a single A credit rating.
Pilbara Cyclone Impact and Associated EBITDA Hit
Although Pilbara recovered strongly, the prior cyclone disruption contributed an estimated ~$700 million EBITDA impact during the year.
Near-Term Volume Headwinds for 2026
Management guided more muted volume growth (~3% across managed operations in 2026) due to offsets including closures at Arvida and Diavik, a midyear curtailment at Yarwun, and an expected grade decline at Escondida.
Lithium Business Not Yet Material and Price Volatility
Lithium was the first year for the new business but not a significant contributor to earnings yet; management noted lithium price volatility (prices cited up significantly since recent site visit) and emphasized focus remains on delivering in‑flight projects before pursuing further expansion.
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
Profitability remains solid (2023–2025 net margins ~17%–19%) with a 2025 revenue rebound (+7.1%), but results are clearly cyclical versus the 2021 peak. Balance sheet is generally well-capitalized with manageable leverage, though 2025 total debt stepped up materially. Operating cash flow is healthy and exceeds net income, but free cash flow has fallen sharply to $4.8B in 2025 and is low relative to net income, which tempers the overall financial strength.Income Statement
Revenue is essentially flat over 2022–2024 (down in 2022–2023, roughly flat in 2024) with a rebound in 2025 (+7.1%). Profitability remains solid for the sector (2023–2025 net margins ~17%–19%), but it is well below the 2021 peak (net margin ~33%) and margins have generally compressed versus 2021–2022. Overall: good earnings power, but clearly cyclical with notable volatility across years.63
Positive
Balance Sheet
Leverage looks manageable with debt-to-equity mostly in the ~0.24–0.40 range, and equity has grown over time (from ~$47.1B in 2020 to ~$62.2B in 2025). The main watch-out is the step-up in total debt in 2025 (to ~$24.6B from ~$13.9B in 2024), which pushed leverage higher versus recent years, even though the overall balance sheet still appears well-capitalized.72
Positive
Cash Flow
Operating cash flow remains healthy (roughly $15–17B from 2022–2025; $25.3B in 2021), and operating cash flow exceeds net income each year shown (a positive quality signal). However, free cash flow has declined from the 2021 high ($18.0B) to $4.8B in 2025 and has been negative growth for multiple consecutive years; in 2025, free cash flow is low relative to net income (about 28%), suggesting heavier reinvestment and/or working-capital/headwind pressure on cash generation.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 | 15.31B | 30.28B | 17.30B | 34.27B | 44.93B |
| EBITDA | 22.26B | 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 | 24.58B | 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
Positive
98.11
Price Trends
87.72
Positive
78.91
Positive
69.48
Positive
Market Momentum
3.02
Positive
61.26
Neutral
56.62
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 98.11 is above the 20-day moving average (MA) of 95.85, above the 50-day MA of 87.72, and above the 200-day MA of 69.48, indicating a bullish trend. The MACD of 3.02 indicates Positive momentum. The RSI at 61.26 is Neutral, neither overbought nor oversold. The STOCH value of 56.62 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 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 | $196.81B | 19.31 | 21.38% | 3.55% | -7.86% | 14.17% | |
69 Neutral | $164.82B | 15.88 | 17.00% | 4.60% | -0.44% | -4.20% | |
68 Neutral | $72.66B | 29.21 | 6.88% | 10.04% | -8.49% | -41.69% | |
67 Neutral | $3.22B | 40.86 | 8.26% | 0.43% | 3.93% | -73.94% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
61 Neutral | $1.58B | -97.63 | -1.64% | 1.14% | 7.92% | 91.83% | |
61 Neutral | $10.36B | -83.22 | -6.83% | ― | 26.44% | -95.87% |
* Basic Materials Sector Average
RIO
Rio Tinto
98.11
40.08
69.07%
BHP
BHP Group
79.65
31.46
65.27%
MTRN
Materion
155.07
62.48
67.47%
VALE
Vale SA
17.03
8.32
95.43%
NEXA
Nexa Resources SA
11.96
6.30
111.31%
MP
MP Materials
58.44
34.67
145.86%
Rio Tinto Corporate Events
Rio Tinto Updates Market on Voting Rights and December 2025 Operational Developments
Jan 5, 2026
In a Form 6-K filed for December 2025 and signed on 5 January 2026, Rio Tinto outlined a series of recent corporate, operational and governance developments, including stock exchange notifications on its total voting rights, changes in director and key management shareholdings, and the issuance and conversion of unquoted equity securities. As part of these disclosures, the company reported that as of 28 November 2025 Rio Tinto plc’s issued share capital consisted of 1,256,010,228 ordinary shares of 10p each, of which 1,717,902 were held in treasury, resulting in 1,254,292,326 voting rights, a key reference figure for shareholders monitoring ownership thresholds under UK transparency rules; it also highlighted its dual-listed capital structure with Rio Tinto Limited, as well as a stream of December announcements covering lithium resource reporting, progress on copper production technology, partnerships with Aboriginal corporations, investment in Pilbara iron ore feasibility work and the introduction of battery-electric haul trucks in the Pilbara, all of which signal ongoing portfolio development and operational modernisation across its core mining businesses.
The most recent analyst rating on (RIO) stock is a Hold with a $70.00 price target. To see the full list of analyst forecasts on Rio Tinto stock, see the RIO Stock Forecast page.
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.