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Rio Tinto PLC ADR RIO

Morningstar Rating
$67.20 +0.23 (0.34%)
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Company Report

Rio Tinto: Solid Iron Ore Sales and Short-Term Price Tailwinds Keep Optimism High

We retain our AUD 112 per share fair value estimate for no-moat Rio Tinto after a solid start to 2024. First-quarter sales are broadly in line with our expectations. Rio’s share of shipments from its Pilbara iron ore operations, the main driver of earnings, was roughly 66 million metric tons, 5% below the same quarter of 2023 and 10% lower than the previous quarter. Inclement weather was the main driver. Management made no changes to guidance, and we continue to forecast 2024 Pilbara iron ore sales of roughly 280 million metric tons (its share), similar to last year. We also reiterate our forecast for 2024 unit cash costs in the Pilbara of roughly USD 23 per metric ton, about 6% higher than last year, driven by inflation.

Price vs Fair Value

RIO is trading at a 8% discount.
Price
$66.97
Fair Value
$85.00
Uncertainty
Medium
1-Star Price
$55.92
5-Star Price
$11.30
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Rio Tinto is one of the direct beneficiaries of China's continuing strong appetite for natural resources.

Bears

With miners including Rio benefiting from high commodity prices, governments may use it as a source of tax revenue to plug shaky budgets.

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News

Trading Information

Previous Close Price
$66.97
Day Range
$66.4767.45
52-Week Range
$58.2775.09
Bid/Ask
$66.99 / $67.45
Market Cap
$109.11 Bil
Volume/Avg
3.9 Mil / 3.1 Mil

Key Statistics

Price/Earnings (Normalized)
9.37
Price/Sales
2.01
Dividend Yield (Trailing)
6.52%
Dividend Yield (Forward)
6.52%
Total Yield
6.52%

Company Profile

Rio Tinto is a global diversified miner. Iron ore is the dominant commodity, with significantly lesser contributions from copper, aluminum, diamonds, gold, and industrial minerals. The 1995 merger of RTZ and CRA, via a dual-listed structure, created the present-day company. The two operate as a single business entity, with shareholders in each company having equivalent economic and voting rights. Major assets included the Pilbara iron ore operations, a 30% stake in the Escondida copper mine, 66%-ownership of the Oyu Tolgoi copper mine in Mongolia, the Weipa and Gove bauxite mines in Australia, and six hydro-powered aluminum smelters in Canada.
Sector
Basic Materials
Industry
Other Industrial Metals & Mining
Stock Style Box
Large Value
Total Number of Employees
57,174

Competitors

Valuation

Metric
RIO
BHP
VALE
Price/Earnings (Normalized)
9.3710.906.39
Price/Book Value
1.983.551.33
Price/Sales
2.012.661.27
Price/Cash Flow
6.576.893.78
Price/Earnings
RIO
BHP
VALE

Financial Strength

Metric
RIO
BHP
VALE
Quick Ratio
1.041.080.60
Current Ratio
1.691.571.28
Interest Coverage
7.777.599.33
Quick Ratio
RIO
BHP
VALE

Profitability

Metric
RIO
BHP
VALE
Return on Assets (Normalized)
11.84%13.90%10.92%
Return on Equity (Normalized)
22.48%31.67%25.89%
Return on Invested Capital (Normalized)
18.83%21.70%19.40%
Return on Assets
RIO
BHP
VALE
See how this stock stacks up to its competitors with Morningstar Investor

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Capital Allocation
Economic Moat
Market Cap
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VALE
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NGLOY
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