With China now enforcing strict restrictions aiming to keep 2021 steel output in-line with 2020 levels, Morgans expects more short-term weakness in iron ore. It’s thought the Chinese government environmental targets will also weigh on the outlook.
While remaining cautious, the analyst feels Rio Tinto shares are trading in accumulate territory. The broker maintains its Hold rating and lowers its target price to $117 from $123, after lowering iron ore price forecasts.
Target price is $117.00.Current Price is $95.24. Difference: $21.76 – (brackets indicate current price is over target). If RIO meets the Morgans target it will return approximately 19% (excluding dividends, fees and charges – negative figures indicate an expected loss).