Investing.com — Barclays cut on Tuesday downgraded to “equal weight” from “overweight” and lowered its price target to 6,600p from 6,885p, citing what it described as tightening valuation and weaker near-term conditions in .
The brokerage said the revised target implies 8% downside to the Feb. 23 close of 7,162p.
Analysts wrote that iron ore markets were near the seasonal high point, noting, “We believe iron ore prices are currently close to the peak of seasonality which typically sees prices progressively decline until Q4, implying Rio’s earnings momentum is likely to wane from here.”
They added that Rio Tinto had “significantly outperformed key peer BHP” since the start of the fourth quarter, leaving the two companies at parity on EV/EBITDA and putting Rio at “the tightest valuation discount to BHP seen since 2020.”
Barclays also said Rio Tinto’s long-term copper position remained constrained. The analysts wrote that the company’s recent approach to Glencore underscored “a lack of copper growth options post 2030,” adding that the issue was “not easily solved other than via M&A.”
Asset-sale prospects were described as limited in the short term. Barclays said Rio Tinto’s targeted $5–10 billion potential divestments “is likely to take time,” and that the upper end of proceeds equates to “456p or 8% NPV upside on a gross basis.”
The brokerage also noted that CEO Simon Trott “sees no rationale for separating iron ore from the rest of the business to liberate value,” saying the diversified model “is the best way to generate value through the cycle.”
The report said RTIT’s performance weakened sharply, with EBITDA margins sliding to 4.4% in the second half of 2025 from a 29.5% average over 2018–24, while free cash flow fell to $59 million. Borates held steadier, posting a 25.8% margin for the full year and $102 million in free cash flow. Book values were unchanged at $3.3 billion for RTIT and $438 million for Borates.
Barclays trimmed its forecasts after Rio Tinto plc’s FY25 results, cutting EBITDA by 2% in 2027 and lowering EPS by 1% and 4% in 2026 and 2027.
The brokerage also reduced its NPV estimate by 6%, citing higher rehabilitation provisions and minority interests at December 2025. Barclays said it continues to prefer Anglo American plc and Glencore, both rated “overweight.”