Here’s what brokers are saying about the Rio Tinto (ASX:RIO) share price

Opinion is divided on Rio Tinto’s shares…

| More on:
Three mining workers stand proudly in front of a mine smiling because the BHP share price is rising

Image source: Getty Images

The Rio Tinto Limited (ASX: RIO) share price may be edging lower on Tuesday but that hasn’t stopped it from recording a solid gain over the last month.

Since this time in January, the mining giant’s shares are up 6%.

Can the Rio Tinto share price go higher from here?

Opinion is reasonably divided on the Rio Tinto share price and its future direction.

For example, the team at Macquarie Group Ltd has an outperform rating and $135.00 price target on its shares.

Whereas over at UBS, its analysts are bearish on the mining giant and have a sell rating and lowly $80.00 price target.

Elsewhere, the team at Morgans is sitting on the fence at the moment and has a hold rating and $104.00 price target on Rio Tinto’s shares.

Morgans has concerns around the long-term impact from what it believes to be a critical underspend in the Pilbara.

The broker commented: “RIO remains in the peculiar position for an iron ore miner of being mine constrained (with infrastructure normally the key bottleneck), with RIO now facing an increasingly tight schedule to bring on new replacement mines.”

“The implications being RIO is struggling to maintain Pilbara iron ore volumes (particularly of its premium Pilbara Blend product) while sustaining capex is highly likely to remain at levels well above its peers for the foreseeable future,” it added.

Morgans is now forecasting total iron ore capex of an average of US$2.8 billion per annum through to 2030. This is almost double its estimate of US$1.5 billion previously.

The broker concludes: “The difficult operating conditions at RIO’s flagship Pilbara iron ore business is unfolding just as the big miner launches an aggressive decarbonization strategy (US$7.5bn spend to 2030), which will further dent FCF [free cash flow] generation. With these risks in mind and RIO trading near our revised price target we maintain our Hold recommendation.”

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of January 12th 2022

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Broker Notes

Red buy button on an apple keyboard with a finger on it.
Broker Notes

Top brokers name 3 ASX shares to buy today

Brokers are feeling bullish about these ASX shares...

Read more »

A trendy woman wearing sunglasses is making it rain, spraying cash on that bargain.
Broker Notes

Macquarie reveals 2 sectors where bargain ASX shares still exist

The broker reckons ASX shares and US equities are still expensive, even after the recent pullback.

Read more »

A man leans out of his car window with a massive smile on his face and waves.
Industrials Shares

‘Too early to brake for the next exit’: What this top broker likes about Transurban shares

Analyst sentiment appears to be bullish on Transurban.

Read more »

a young girl wearing a set of airplane wings stands on a tarmac with hands in the air and an excited look on her face as though she is about to take off.
Broker Notes

Ready for takeoff? Top broker sees smooth runway for Qantas shares in 2022

Travel stocks are back in the limelight it seems.

Read more »

A group of three builders wearing worker overalls and carrying hard hats in their hands jumps jubilantly atopa rooftop space on a commercial building with an airconditioner shaft in the background and the sun behind a light cloud behind them.
Broker Notes

Why is the James Hardie share price surging higher today

We look at what's driving the recovery in the building materials company's shares on Wednesday.

Read more »

a young boy dressed up in a business suit and tie has a cute grin and holds two fingers up.
Ask a Fund Manager

2 ASX shares I have supreme confidence in: fund manager

Ask A Fund Manager: Glenmore Asset Management's Robert Gregory names a pair of stocks that are both his biggest holdings…

Read more »

Two brokers analysing the share price with the woman pointing at the screen and man talking on a phone.
Broker Notes

How does the IAG share price stack up against analyst ratings?

Let's check in and see.

Read more »

A man wearing a shirt, tie and hard hat sits in an office and marks dates in his diary.
Broker Notes

Broker names 3 reasons the South32 share price could be cheap

South32 shares could be great value according to one leading broker...

Read more »