Rio Tinto mines for and produces aluminum, copper, gold, silver, and molybdenum, nickel, diamonds, titanium dioxide feedstocks, borates, salt, iron, metal powders, zircon, thermal coal, coking or metallurgical coal, uranium, and iron ore. The company was founded in 1873 and is based in London, the United Kingdom.
RIO Price Forecast Based on DCF Valuation
DCF Fair Value Target:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for Rio Tinto Ltd. To summarize, we found that Rio Tinto Ltd ranked in the 64th percentile in terms of potential gain offered. More precisely, our analysis suggests the stock is undervalued by approximately 140.5% on a DCF basis. As for the metrics that stood out in our discounted cash flow analysis of Rio Tinto Ltd, consider:
As a business, RIO is generating more cash flow than 97.7% of positive cash flow stocks in the Basic Materials.
Rio Tinto Ltd's weighted average cost of capital (WACC) is 8%; for context, that number is higher than merely 24.79% of tickers in our DCF set.
RIO's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than merely 24.79% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Basic Materials that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as RIO, try CLW, CCR, GFI, CNR, and ROCK.
BHP Group (BHP) and Rio Tinto Group (RIO) are similar in some ways, yet different in other ways. Lately, both companies have come to depend more and more on iron ore for most of their earnings, despite the two having a diverse portfolio of products to fall back on. How...
MarketGyrations on Seeking Alpha | September 30, 2020
New Zealand Prime Minister Ardern says her government will negotiate to extend the operations of Rio Tinto's (RIO) Tiwai Point aluminum smelter by 3-5 years if she is returned to power in the upcoming election.The planned closure is a hot election topic as it puts thousands of jobs at riskat...