At Friday’s market close and for end of April, the mining giant’s shares finished almost 5% down. This is despite the company edging around 4% higher in the last three trading days of the month.
What’s going on with Rio Tinto shares?
Investors were heading for the exits as the Rio Tinto share price fell more than 10% following the company’s first-quarter results.
Rio Tinto delivered its first-quarter production report on 20 April, revealing a soft performance across the board.
Management acknowledged another difficult quarter operationally despite the commencement of underground mining at Oyu Tolgoi.
Market expectations were revised downwards amidst sustained high inflation, the Russia-Ukraine war, and a resurgence of COVID-19 lockdowns in China.
While commodity prices increased due to disruptions in supply, production diminished because of downside risks to near-term construction activity.
Nonetheless, the miner stated that full-year shipments guidance remains unchanged.
The news sent Rio Tinto shares backtracking almost 3% on the day.
Rio Tinto noted that further downside risks include a prolonged war, extended labour and supply shortages, and monetary policy adjustments.
What do the brokers think?
A number of brokers weighed in on Rio Tinto’s shares after the release of its latest performance report.
Analysts at Goldman Sachs cut its price target by 1% to $135.10. Based on the current share price, this implies an upside of around 20%. Clearly, the broker believes there is still significant value in the miner despite the short-term volatility.
On the other hand, Morgans had a more bearish tone, slashing its 12-month rating by 6.6% to $114.00. This is in line with where the Rio Tinto share price traded on Friday.
Rio Tinto share price review
Over the past 12 months, Rio Tinto shares have dipped by about 7%. Although, when looking at 2022, its shares have gained almost 13% for the period.
On valuation grounds, Rio Tinto commands a market capitalisation of roughly $41.88 billion.