Rio Tinto (RIO.L)
Materials · LSE · UK
Fundamentals
Valuation and ratings
Rio Tinto trades at £67.41, which is 18% above the £55.00 our discounted cash flow model puts on the business. On that measure it screens as expensive, which is not the same as saying it will fall.
Our moat model scores it 60 out of 100, which is a moat, but not a deep one. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 14.6 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About Rio Tinto
Rio Tinto Group engages in exploring, mining, and processing mineral resources worldwide. The company operates through Iron Ore; Aluminium and lithium; and Copper segments. The Iron Ore segment engages in the iron ore mining, and salt and gypsum production in Western Australia. The Aluminum and lithium segment is involved in bauxite mining; alumina refining; and aluminium smelting, and recycling, as well as mining and processing of lithium. The Copper segment engages in mining and refining of copper, gold, silver, molybdenum, and other by-products and exploration activities. It also owns and operates open pit and underground mines; and refineries, smelters, processing plants and power, and shipping facilities. The company was founded in 1873 and is headquartered in London, the United Kingdom.
RIO.L passes 6 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Common questions
Is Rio Tinto (RIO.L) undervalued?
Against our discounted cash flow estimate of £55.00, RIO.L at £67.41 is 18% above fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
What is RIO.L's P/E ratio?
RIO.L trades at 14.6 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
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Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.