Goldman Sachs tips Rio Tinto shares as a buy

Goldman's is forecasting iron ore price to average US$86 a tonne over 2020.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Rio Tinto Limited (ASX: RIO) shares are up 22 per cent over the past year with the miner also handing out $8.97 in dividends over the period as well. That amount includes a special dividend paid in April 2019 to mean the stock has yielded a whopping 9.1% for shareholders over the past 12 months. It also bought back around US$1 billion of shares over the period. 

According to a research note out of Goldman Sachs Rio might have upside ahead.

Goldman's is forecasting the iron ore price to average US$86 a tonne over 2020. As a result it expects Rio to earn US$5.50 per share over fiscal 2020. Total Pilbara iron ore production is estimated between 330 million tonnes to 340 million tonnes over 2020. 

As a result of its production and earnings forecasts Goldman's is tipping Rio shares to hit $99.20 over the next 12 months. It also has a buy rating on BHP Group Ltd (ASX: BHP) shares and a neutral rating on Fortescue Metals Group Limited (ASX: FMG).

Motley Fool contributor Tom Richardson has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

A diverse group of people form a circle at a park and raise their arms together.
Share Gainers

Here are the top 10 ASX 200 shares today

Investors pulled back from the market's record highs this Thursday.

Read more »

A few gold nullets sit on an old-fashioned gold scale, representing ASX gold shares.
Broker Notes

This ASX 200 gold stock could shine bright, says top broker

Poised to soar?

Read more »

Three miners looking at a tablet.
Resources Shares

3 ASX mining shares to sell today: experts

These iron ore, coal, and lithium miners have attracted sell ratings from brokers.

Read more »

Five different piggy banks, indicating a diverse share portfolio.
Bank Shares

Investing in ASX 200 banks: Which macroeconomic variables matter according to Macquarie

The majority of absolute bank performance can be explained by four key factors.

Read more »

Happy miner giving ok sign in front of a mine.
Broker Notes

Macquarie forecasts 40% upside for this ASX mining stock

Ready to rock.

Read more »

a young woman raises her hands in joyful celebration as she sits at her computer in a home environment.
Share Gainers

Why DroneShield, EOS, Larvotto, and Life360 shares are racing higher today

These shares are having a strong session. But why?

Read more »

A man holds his head in his hands after seeing bad news on his laptop screen.
Share Fallers

Why Beach Energy, Cettire, Flight Centre, and Pilbara Minerals shares are sinking today

These shares are having a tough time on Thursday. But why?

Read more »

Red arrow going downwards in front of oil pumpjacks.
Energy Shares

Why did this $2.7 billion ASX 200 energy share just crash 11%?

Investors are fleeing the ASX 200 energy stock today. But why?

Read more »