Why is the Rio Tinto share price stretching down a further 3% on Friday?

a sad looking engineer or miner wearing a high visibility jacket and a hard hat stands alone with his head bowed and hand to his forehead as he speaks on a mobile telephone out front of what appears to be an on site work shed.a sad looking engineer or miner wearing a high visibility jacket and a hard hat stands alone with his head bowed and hand to his forehead as he speaks on a mobile telephone out front of what appears to be an on site work shed.

The Rio Tinto Limited (ASX: RIO) share price has dipped its toes into the red on Friday and is currently down 2.84% at $108.41.

It has now fallen almost 4% this week, and 10% over the past month.

While there’s been nothing price-sensitive out of the mining giant’s camp today, commodity and precious metals players have incurred losses across the board.

In wider market moves, the S&P/ASX 300 Metals & Mining Index (ASX: XMM) and the S&P/ASX 200 Materials Index (ASX: XMJ) are each down by 3%.

What’s up with the Rio Tinto share price today?

Australian-based commodity and resources ETFs performed well in 2022 and have realised heavy inflows both as a cause and effect of this trend.

However, these appear to have slowed in recent weeks, with the SDPR S&P/ASX 200 Resources Fund (ASX: OZR) clipping a $7.9 million outflow last month, and another $2.7 million this week, per Bloomberg data.

Hence, market dynamics have weighed in, spurred on by the outlook on Rio’s company fundamentals, according to analysts at JP Morgan.

“[Q1 FY22] iron ore shipments were an 8% miss vs JPM estimates on replacement mine commissioning issues and COVID disruptions,” the broker wrote in a recent note.

“2022 guidance of 320-335Mt is unchanged but given Q1 weakness we believe the market will now move towards the lower end.

“Overall, it was another soft quarter from RIO.”

JP Morgan is neutral on the stock, unlike many others, with 53% of analysts recommending to hold Rio at present, according to Bloomberg data.

The consensus price target on this coverage is $122 per share, suggesting a disconnect in analyst sentiment/outlook versus what the market is pricing for Rio Tinto.

In the last 12 months, the Rio Tinto share price has disappointed and is down 14% in that time. It has secured an 8% gain this year, while the SPDR Resources Fund is up 11%.

The post Why is the Rio Tinto share price stretching down a further 3% on Friday? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Rio Tinto right now?

Before you consider Rio Tinto, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Rio Tinto wasn’t one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

More reading

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/S4jl2v5

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s