Morningstar retains fair value estimate for Rio Tinto, says shares are overvalued

By Reuters News

** Morningstar says Rio Tinto's RIO.AX third-quarter 2026 performance across its major businesses was satisfactory

** On Wednesday, Rio Tinto reported a 2% rise in third-quarter iron ore sales and maintained its 2026 forecast

** The firm says miner remains on track to meet its 2026 sales volume forecasts of about 280 million metric tons of Pilbara iron ore, 725,000 tons of copper and 3.4 million tons of aluminium

** Says high by-product prices, including gold, silver and molybdenum, are more than offsetting cost headwinds in Rio Tinto's copper business

** Adds, Rio shares are about 23% overvalued on optimism around copper demand from AI-related investment and the energy transition, with copper, iron ore and aluminium prices trading materially above its assumed midcycle prices

** Looking ahead, it says Rio Tinto's Pilbara operations are facing elevated diesel and freight costs and a stronger AUD/USD exchange rate

** YTD, shares are flat, as of last close

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