The Rio Tinto Limited (ASX: RIO) share price is on course to end the week in the red.
In morning trade, the mining giant's shares are down almost 1% to $91.50.
This means the Rio Tinto share price is now down over 5% this week after investors responded negatively to the miner's quarterly update.
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Is the Rio Tinto share price good value?
Analysts at Morgans believe investors should take advantage of the weakness in the Rio Tinto share price.
According to a note, the broker has retained its add rating and $108.00 price target on the company's shares.
This implies a potential 12-month return of 18% for investors before dividends and 24% including them.
What did the broker say?
Morgans was disappointed with the miner's quarterly update and highlights that it was a reminder that that "there are no quick fixes to Rio Tinto's productivity issues across its global operations."
It also notes that the company has downgraded its guidance for iron ore shipments and refined copper production.
Nevertheless, this isn't enough to change the broker's view than Rio Tinto would be a great option in the resources sector right now. Particularly given how immaterial these downgrades are to the company's long term outlook.
It explained:
The operational weak-points and guidance cuts are disappointing, but they alone are not material to RIO's long-term fundamentals. Instead we remain focused on whether RIO can achieve sustainable operating changes to solve the productivity issues across its global business. We think that lasting change, especially to productivity in a business this scale, is not something that can realistically happen quickly with weak quarters like 3Q22 likely to continue to occur in the meantime.
Putting the 3Q22 result into perspective, we still see RIO boasting solid earnings quality, dividend yield, balance sheet strength and trading at a discount to our $108.00 Target Price. We maintain our Add rating.
