The Rio Tinto share price has dumped 8% in a week. Is it now cheap?

a mine worker holds his phone in one hand and a tablet in the other as he stands in front of heavy machinery at a mine site.a mine worker holds his phone in one hand and a tablet in the other as he stands in front of heavy machinery at a mine site.

The Rio Tinto Ltd (ASX: RIO) share price has been sliding lately but could it be set to bounce?

Rio Tinto shares have slipped 8.3% from $111.85 at market close on 3 May to the current share price of $102.57. In today’s trade, the Rio Tinto share price has fallen nearly 4%. For context, the S&P/ASX 200 Index (ASX: XJO) is 1.46% lower at the time of writing.

So what is the outlook for the Rio Tinto share price?

Could Rio go higher?

Rio shares may be down in the past week but they are not the only ASX mining shares to suffer. For perspective, the S&P/ASX 200 Resources Index (ASX: XJR) has plunged more than 6% since market close on 3 May and is down more than 3% today.

Brokers have a mixed view of the Rio Tinto share price. Macquarie recently placed a $140 price target on the company’s shares and rates it as a buy. This is a 25% upside on the current share price.

Meantime, Citi has placed a $135 price target on the company’s shares and also rates it as a buy. Both of these analysts are optimistic about the future outlook of the Rio Tinto share price.

However, UBS has a neutral rating on Rio with a $104 price target on the company’s shares. JP Morgan is also neutral on the stock, as my Foolish colleague Zach recently reported. Analysts, on average, predict the Rio share price to hit $128.52 in the next 12 months, according to NAB trade.

In the company’s recent 5 May AGM, CEO Jakob Stausham highlighted Rio Tinto aims to boost its investment in growth capital to US$3 billion in 2023 and 2024. The company also plans to focus on commodities “essential for the drive to net zero”. Stausham added:

We have demonstrated our willingness to grow via acquisitions. The Rincon lithium project in Argentina brings growth in a commodity essential to the energy transition, while at Oyu Tolgoi our proposal to acquire full ownership of Turquoise Hill will simplify the ownership structure and provide additional exposure to copper.

Share price snapshot

Rio Tinto shares have descended 23% in the past 52 weeks, while the company’s share price is just over 2% in the green year to date.

For perspective, the benchmark ASX 200 has shed more than 2% over the past year.

Rio Tinto has a market capitalisation of about $38 billion.

The post The Rio Tinto share price has dumped 8% in a week. Is it now cheap? appeared first on The Motley Fool Australia.

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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.

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