Deutsche Bank Research has cut its recommendation on Rio Tinto to 'hold' from 'buy', lowering its price target to 5,100 pence from 5,300 pence. JPMorgan also reduced its price target for Rio Tinto to 5,450 pence from 5,570 pence, while maintaining an 'overweight' rating. Conversely, Jefferies raised its price target for Rio Tinto to 4,650 pence from 4,400 pence, keeping a 'hold' rating.
Despite these mixed analyst views, Rio Tinto reported a strong first half of 2026. The company achieved a 28% increase in underlying EBITDA, reaching $14.8 billion, and a 75% rise in free cash flow, totaling $3.8 billion. Profit after tax attributable to owners of Rio Tinto grew 47% to $6.7 billion, with underlying earnings up 43% to $6.9 billion. This performance resulted in an underlying return on capital employed (ROCE) of 17%.
Rio Tinto's strong cash generation, with $9.2 billion in operating cash flow, supported continued investment in growth projects. The company declared an interim ordinary dividend of $3.4 billion, a 43% increase, reflecting a payout ratio of 50%. Management noted accelerating productivity and plans to unlock $5 billion to $10 billion from non-core disposals, positioning Rio Tinto favorably as it exits a heavy capital expenditure cycle compared to BHP, which is entering one.
