Berenberg lowers target price on Rio Tinto
Analysts at Berenberg lowered their target price on mining giant from 6,200.0p to 6,000.0p on Friday following the group's Q3 operational review.
Berenberg said Rio Tinto's iron ore production of 84.1mt was "a little light" versus its 85.2mt forecast, while shipments of 84.5mt were also "a touch lighter" than expectations 85.2mt. More SP10 lump material was shipped than expected, with the lower-grade SP10 material making up roughly 18% of shipments in Q1-Q3 compared to approximately 12% in Q1-Q3 2023.
Mined copper volumes of 168,000 tonnes was in line with forecasts. However, the German bank stated the details tell a different story, with weakness at Kennecott offset by better numbers at Oyu Tolgoi in Mongolia and Escondida in Chile.
"We update our model for the Q3 results. The big question mark on volumes in 2025-26 is Kennecott, and we lower our mined volumes estimates to account for limited access to higher-grade ore. We will only know if our estimates are fair when Rio updates the market in December, but the impact is a c3% reduction to our copper volume forecasts over 2024-26E," said Berenberg, which reiterated its 'buy' rating on the stock.
Reporting by Iain Gilbert at Sharecast.com
Disclaimer & Declaration of Interest
The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.