Up 20% this year, are Rio Tinto shares still good value?

Investors have enjoyed a strong run. Is there more upside ahead?

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Rio Tinto Ltd (ASX: RIO) has had a pretty impressive 2026 so far.

The shares are up around 20% since the start of the year and more than 50% over the past 12 months.

The shares climbed as high as $195.84 earlier this year before falling back towards $160 in late July. Since then, the stock has worked its way higher again and is trading at $175.65 on Friday, down 0.82%.

So, do Rio Tinto shares still look like good value?

Value spelt out in different colours with magnifying glasses.

Image source: Getty Images

The shares aren't exactly cheap

I don't think the shares look especially cheap at current levels, but I also wouldn't call them expensive.

Consensus forecasts point to earnings per share (EPS) of around $12.07 in FY26 and $12.04 in FY27. At today's share price, that puts Rio Tinto on roughly 14.5 times forecast earnings.

There isn't much growth in those numbers, although that is hardly unusual with a miner. Earnings can move around a lot from year to year depending on commodity prices.

The latest half-year result was also pretty strong.

Revenue rose 15% to US$31 billion, while underlying EBITDA increased 28% to US$14.8 billion. Underlying earnings climbed 43% to US$6.85 billion and operating cash flow rose 75% to US$9.8 billion.

That also allowed Rio Tinto to lift its interim dividend by 43% to US$2.11 per share.

There's more than just iron ore

Iron ore is still the biggest part of Rio Tinto's business, so earnings will always be sensitive to commodity prices and demand from China.

But the company is gradually becoming less reliant on it.

Copper, aluminium and lithium contributed more than half of underlying EBITDA in the first-half, while copper production from Oyu Tolgoi jumped 31%.

That gives Rio Tinto an interesting growth story, especially with copper demand expected to remain strong over the longer term.

And there is also more production still to come. Oyu Tolgoi continues to ramp up, while the Simandou iron ore project in Guinea is another major development that could add to volumes over the next few years.

What do brokers think?

This is where things get a bit more mixed.

TipRanks shows an average 12-month price target of $174.28 across 10 analysts, which is almost exactly where the shares trade today.

JPMorgan is the most bullish with a $207 target, while Ord Minnett and Jefferies are both at $187. Goldman Sachs has a target of $181.90 and Macquarie is at $180.

At the other end, Morgan Stanley has a 'sell' rating and $150 target, while RBC Capital is even more cautious at $143. Citi is at $171 and UBS at $177.

I think Rio Tinto still looks reasonably priced, but I wouldn't be rushing in after a 20% rise this year. I'd rather wait for another pullback below $150 before buying around these levels.

JPMorgan Chase is an advertising partner of Motley Fool Money. Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and JPMorgan Chase. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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