Rio Tinto Shares Hits All-Time High as Markets Look Past Failed Glencore Merger

Rio Tinto share price (LON: RIO) surged to a fresh all-time high today, climbing 2.68% to 7,273p after touching an intraday peak of 7,284p. The rally comes despite Citi reinstating coverage on the mining giant with a Neutral rating and a 7,000 GBp price target, following the collapse of merger discussions with Glencore that had dominated headlines just days earlier.

The move higher represents a remarkable turnaround in market sentiment. Less than a week ago, Rio Tinto's shares tumbled 5.56% on February 5 when the company announced it had terminated $260 billion merger talks with Glencore.

The negotiations, which would have created a mining behemoth, broke down over fundamental disagreements on valuation and governance structures. Rio Tinto had sought a larger share of the combined entity and pushed to retain both the chairman and chief executive positions, demands that Glencore refused to accommodate. Trading volume surged by 35.67% on the day of the announcement, reflecting significant market anxiety over the failed deal.

The swift recovery in Rio Tinto's share price appears driven by strong operational performance and favourable commodity market dynamics. The company reported a 7% increase in quarterly iron ore shipments, achieving record annual volumes of 326.2 million tonnes in 2025. Copper production also impressed, rising 5% year-on-year to 240,000 tonnes in the fourth quarter, with full-year output of 883,000 tonnes exceeding company guidance. These production milestones have coincided with rising iron ore prices, providing a powerful tailwind for the stock.

Analyst sentiment remains mixed following the merger collapse. Morgan Stanley downgraded Rio Tinto from Overweight to Equal Weight in late January, adopting a more cautious stance on the shares. However, JP Morgan Cazenove maintained its Overweight recommendation, suggesting continued confidence in the company's standalone prospects. Citi's reinstatement at Neutral with a 7,000 GBp target implies limited upside from current levels, yet the stock has already surpassed this benchmark.

Morningstar analysts have suggested Rio Tinto's shares remain approximately 5% undervalued, attributing the discount to lingering concerns over potential U.S. tariffs on commodity imports. This view implies further upside potential despite the stock's recent strength.

The market's ability to look past the failed Glencore merger marks the third unsuccessful attempt at combining these two mining giants. Rather than viewing the breakdown as a strategic setback, markets appear to be rewarding Rio Tinto's decision to maintain its independence and focus on core operational excellence. The company's robust production figures across both iron ore and copper have reinforced confidence in its ability to generate strong returns without transformational M&A activity.

The technical picture now shows Rio Tinto trading at unprecedented levels, having overcome the sharp selloff triggered by the merger announcement. The stock's resilience suggests markets are prioritizing fundamental operational strength and commodity price momentum over strategic deal-making.

With production targets being exceeded and iron ore demand remaining firm, the bullish sentiment appears grounded in tangible business performance rather than speculative positioning.