Rio Tinto Ltd (ASX: RIO) Shares: A Look into the Recent Surge - Kalkine Media

December 07, 2023 05:02 PM AEDT | By Team Kalkine Media
Follow us on Google News:

Rio Tinto Ltd (ASX: RIO), listed on the Australian Stock Exchange under the ticker RIO, has been demonstrating an impressive uptick in its shares during the latest trading session. At the time of this writing, the mining behemoth's shares are surging by 1.04% to reach AU$127.76 apiece, marking a noteworthy increase compared to the ASX 200 index, which is experiencing a 0.071% decline.

The significant surge in Rio Tinto's shares seems to be predominantly driven by a favorable reception to its recent investor day event within the brokerage community. In particular, prominent financial institutions such as Morgan Stanley and Goldman Sachs have expressed optimistic sentiments, elevating the stock's outlook.

Analyst Projections and Targets

Morgan Stanley, reiterating its overweight rating, has set a price target of AU$134.50. This forecast suggests a potential upside of over 5% for investors, signaling a positive trajectory for the company. Additionally, they anticipate a fully franked 5.5% dividend yield in FY 2024, potentially boosting the total return to 10.5%.

Goldman Sachs, maintaining a buy rating with a price target of AU$137.70, envisions an upward movement of 7.5% over the next year. Moreover, Goldman foresees a 5% dividend yield in the coming year, potentially resulting in a 12.5% return for investors, provided their recommendation holds.

Impact of Iron Ore Plans on Projections

Discussing the recent update on Rio Tinto's iron ore plans, Goldman Sachs highlighted several aspects. Notably, details regarding Simandou, including project scope, timing, and economics, were largely in line with their estimates. They value RIO's 45% share of Simandou at around US$5.5 billion or approximately AU$5 per share.

Valuation Assessment and Conclusion

Goldman Sachs maintains a positive stance on Rio Tinto, emphasizing its compelling relative valuation and appealing free cash flow and dividend yield.

In conclusion, the recent surge in Rio Tinto's shares can be attributed to the favorable reception of its investor day event and positive analyst projections. With encouraging valuations and promising iron ore plans, Rio Tinto appears to be positioned favorably in the market.


The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.

Top ASX Listed Companies

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK