JPMorgan moves to ‘overweight’ on Rio Tinto following period of restriction

The bank noted that it upgraded its EMEA Metals & Mining sector view in February, reflecting its expectation for stronger China growth momentum following the annual NPC meeting on 5-8 March.

It pointed out that Rio shares are only around 3% higher over this period, outperforming the sector by around 5%, and that Rio is its only ‘overweight’ among EMEA diversified miners. JPM said it expects sustained outperformance versus peers in 2025.

"We forecast 25-30% EBITDA growth versus 2024E at spot commodity prices, 2025/26E mark to market EBITDA implies circa 25% upside to Bloomberg consensus largely due to the more than 10% rally in copper year-to-date, plus Rio’s trading multiples are at a 10-20% discount to peers and its own trading history (4.5x 2025/26E EV/EBITDA, circa 7% free cash flow yield)," it said.

JPM said Rio has substantially the highest copper volume growth of the EMEA diversified miners at more than 30% 2024-28E.