Berenberg lowers target price on Rio Tinto

Berenberg said Rio Tinto's iron ore production of 84.1mt was "a little light" versus its 85.2mt forecast, while shipments of 84.5mt were also "a touch lighter" than expectations 85.2mt. More SP10 lump material was shipped than expected, with the lower-grade SP10 material making up roughly 18% of shipments in Q1-Q3 compared to approximately 12% in Q1-Q3 2023.

Mined copper volumes of 168,000 tonnes was in line with forecasts. However, the German bank stated the details tell a different story, with weakness at Kennecott offset by better numbers at Oyu Tolgoi in Mongolia and Escondida in Chile.

"We update our model for the Q3 results. The big question mark on volumes in 2025-26 is Kennecott, and we lower our mined volumes estimates to account for limited access to higher-grade ore. We will only know if our estimates are fair when Rio updates the market in December, but the impact is a c3% reduction to our copper volume forecasts over 2024-26E," said Berenberg, which reiterated its 'buy' rating on the stock.

Reporting by Iain Gilbert at Sharecast.com