Rio Tinto Group (NYSE:RIO) is one of the Best Undervalued UK Stocks to Invest In. On February 27, Ben Davis from RBC Capital reiterated a Hold rating on the stock with a 5,900p price target. Earlier on February 24, Amos Fletcher from Barclays downgraded the stock from Buy to Hold and lowered the price target from 6,885p to 6,600p.
The ratings follow the company’s fiscal 2025 earnings release, announced on February 19. Rio Tinto Group delivered an 8% year-over-year increase in net cash generated from activities to reach $16.83 billion. The adjusted EBITDA grew 9% during the same time to reach $25.4 billion. Management highlighted an 8% in copper equivalent production, driven by the completion of the Oyu Tolgoi underground copper mine and ramp-up in Pilbara iron ore. Moreover, the company also delivered record annual bauxite production and showed strong growth in the aluminum segment.
Photo from Orla Mining website
Fletcher from Barclays downgraded the rating and lowered the price target despite strong results. He said in a research note that iron ore prices are near seasonal peaks; however, seasonal headwinds are expected to result in a decline. Moreover, the analyst also noted that the company’s valuation discount to its peer BHP is also the narrowest since 2020, limiting further upside after Q4 gains.
Rio Tinto Group is a leading global mining and materials company headquartered in London, United Kingdom. It focuses on exploring, mining, and processing essential mineral resources across more than 35 countries.
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