Rio Tinto Upgraded to Buy as Berenberg Notes 'Refreshing' H1 Earnings Report; Price Target Raised

07:06 AM EDT, 07/31/2026 (MT Newswires) -- Berenberg lifted its rating and price target for Rio Tinto Group (RIO.L) as it took into account the mining giant's half-year earnings report and increasing cash flow generation. "We upgrade Rio Tinto to Buy (from Hold) and believe that investors who have enjoyed the outperformance of BHP [BHP.L, BHG.JO] versus Rio Tinto ytd (BHP up by 39% versus Rio up 16% ytd) have an opportunity to switch their allegiance from one major iron ore producer to another as we move into H2. In our view, BHP appears to have benefited from its primary listing in Australia over H1 and some investor rotation out of certain sectors, such as banks, into mining," analysts wrote in a note published Thursday. "However, if we compare the two businesses, we think that Rio offers a more compelling FCF yield (7% versus BHP at 5.5% over 2026-28E) and a better dividend yield over the same period (5.4% versus BHP at 3.1%)." The research firm said it also found Rio Tinto's first-half results to be "refreshing," highlighting the miner's productivity focus and plans to generate $5 billion to $10 billion in cash proceeds by selling non-core assets from its portfolio. Financial estimates for the company were also revised, including higher projected sales, EBITDA and EPS for full-year 2026 through 2028. Against this backdrop, the stock's price target was increased to 86 pounds sterling from 81 pounds.