Rio Tinto Shares ‘Run Too Hard’

Rio Tinto (LON: RIO) (ASX: RIO) (NYSE: RIO) shares have gained in 2022, with its London-listed and Australian-listed shares up around 13/14% this year.

However, JPMorgan analyst Lyndon Fagan said in a note to investors on Tuesday that with the stock having risen this year, outperforming iron ore’s rise of 8%, he believes it has “run too hard.”

According to TheFly, the analyst downgraded the mining company’s Australian-listed shares to Underweight from Neutral with a price target of A$95, up from A$93.

JPMorgan’s move followed UBS’ downgrade of Rio Tinto’s London-listed shares to Sell from Neutral to Sell on Monday. UBS analyst Myles Allsop raised the firm’s price target on Rio Tinto shares to 5,000p from 4,600p.

The analyst said the macro backdrop for commodities and miners improved in November when China began to ease Covid restrictions and announced a meaningful property stimulus, driving an “aggressive” response in the stock price. However, he believes that after moving up 38% since the end of October, the stock price has “moved too far, too fast.”

According to TipRanks, analysts covering Rio Tinto are split in their assessment of the stock, with four assigning the company’s shares a Buy rating, six at Hold, and four at Sell. The average price target of 5,371.85p represents an almost 5% downside.