JP Morgan has resumed coverage of Rio Tinto Ltd (LSE:RIO, ASX:RIO, OTC:RTNTF) with an upbeat assessment of the prospects for the mining major - encapsulated in its 'overweight' stance on the stock and its price target of 5,920p, implying a 20% upside.
The investment bank now sees Rio as its top pick among European, Middle Eastern, and African diversified miners, citing strong growth prospects and an attractive valuation.
JPM analysts believe Rio is set for a significant earnings boost in 2025, forecasting 25-30% EBITDA growth compared to last year, largely thanks to copper prices surging over 10% this year.
Its analysts expect the group to outperform its mining peers, pointing out that its shares currently trade at a 10-20% discount both to rivals and its own historical averages.
One of Rio’s biggest strengths, according to the bank, is its massive copper expansion plans.
It has the highest projected copper volume growth among its diversified mining peers, with production expected to rise by more than 30% between 2024 and 2028.
With demand for copper surging due to its use in renewable energy and electric vehicles, JP Morgan believes this puts Rio in an enviable position.
In early afternoon trading, the stock was up marginally at 4,899.52p.