Broker tips: Rio Tinto, Bunzl

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.

Citi downgraded Bunzl to 'neutral' from 'buy' on Friday after a run-up in the shares, but reiterated its 3,700.0p price target on the stock.

The bank said management comprehensively reset market expectations at the time of Bunzl's interim results, promising growth inflection, solid margin prospects, M&A, and buybacks. This drove a 10-15% share price appreciation, it said.

"Given high expectations, we find it difficult to articulate further incremental, positive share price catalysts," Citi said.

The bank said it had decided to downgrade the stock, with its earnings forecasts "close to consensus and with the shares now trading in line with long-run valuation multiples".