After a meeting with Simon Trott, Rio Tinto’s Chief Executive of Iron Ore, Morgans existing concerns deepened around the long-term impact of what the analyst considers has been a significant underspend in the Pilbara. Target price falls to $104 from $112.
The broker notes the company is mine constrained (with infrastructure normally the key bottleneck). It’s thought there’s an increasingly tight schedule to bring on new replacement mines. Additional red tape after Juukan Gorge and covid travel restrictions further weigh.
The broker’s Hold rating is maintained.
Sector: Materials.
Target price is $104.00.Current Price is $95.23. Difference: $8.77 – (brackets indicate current price is over target). If RIO meets the Morgans target it will return approximately 8% (excluding dividends, fees and charges – negative figures indicate an expected loss).
