The Rio Tinto Limited (ASX: RIO) share price has outperformed the S&P/ASX 200 Index (ASX: XJO) over the last 12 months. And one broker tips it to continue to rise.
Right now, the Rio Tinto share price is $126.01, 11.1% higher than it was this time last year.
For comparison, the ASX 200 has gained 1.3% in that time.
Let's take a look at whether Rio Tinto shares could represent a buying opportunity this year.
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Rio Tinto shares tipped to gain 6.6%
The Rio Tinto share price has had a good start to this year. It's gained 9% year to date amid strong quarterly results, which dropped on Tuesday. This week's release also led one top broker to up its price target for the stock.
The iron ore production at the company's Pilbara operations increased 6% year-on-year last quarter, reaching 89.5 million tonnes, while iron ore shipments lifted 4% year-on-year to 87.3 million tonnes, and its realised average iron ore price came in at US$97.60 per wet metric tonne.
Its iron ore guidance for 2023 remains flat at 320 million tonnes to 335 million tonnes.
Meanwhile, the company upgraded its mined copper production forecasts to between 650 thousand tonnes to 710 thousand tonnes after completing its US$3.1 billion acquisition of Turquoise Hill Resources in mid-December.
Goldman Sachs upped its price target on Rio Tinto shares from $130 to $134.40 on the back of the release. That represents a potential 6.6% upside.
It believes the stock is trading at a "compelling valuation" and expects it to restart production growth this year.
It also likes the company's low carbon aluminium business, saying it's one of the highest margin, lowest emitting of its type in the world.
I think Rio Tinto could be a 2023 buy
There are plenty of reasons to like the ASX 200 iron ore giant right now, in my opinion.
The stock currently offers a price-to-earnings (P/E) ratio of 10.29 and a 26.4% debt-to-equity ratio, according to CommSec data. Additionally, its current 7.6% dividend yield is particularly tempting.
All that, combined with Goldman Sachs' positive growth forecast, leads me to believe Rio Tinto shares could be a worthwhile addition to my portfolio in 2023.
