Rio Tinto (LSE:RIO) shares have fallen by a high single-digit percentage since the start of 2025. At £43.97 per share, they’re down 8% on fears over trade tariffs and their potential impact on commodities demand.
They’re now down 15% over the last 12 months.
I’ve clung onto my own shares in the FTSE 100 company, however, in anticipation of a recovery during the new commodities supercycle. I’m confident this will lead to some healthy share price gains and dividend income.
But when could this price recovery come about? Here’s what City analysts think.
Bright price forecasts
On the whole, forecasts for Rio Tinto are pretty encouraging. Currently, 19 brokers have ratings on the Footsie share, providing a good depth of opinion. And they think it will rise by almost a fifth in value between now and next summer.
As is typical, however, there is a range of both bullish and bearish views across this group. To be honest, though, I wouldn’t put a large bet on any of these analysts’ estimates.
That’s no reflection of the quality of the forecasts. Rather, it indicates of high level of uncertainty in the global economy and by extension the mining industry, which is a highly cyclical sector.
Punishing trade tariffs introduced by the US and its trading partners could significantly impact metals demand and prices. But volatile White House trade policy makes it tough to predict near-term movements.
This illustrates how even strong operational performance doesn’t always lead to profits growth. Last year, production from all Rio’s assets rose 1% on a copper equivalent basis. But lower iron prices meant revenues and underlying EBITDA (earnings before interest, tax, depreciation, and amortisation) still fell 1% and 2%, respectively.
Dividend drops expected
Like Rio Tinto’s share price, dividends over the near term are also tough to predict in the current climate. That said, City analysts believe that they’ll continue falling through to the end of next year along with profits. Earnings per share are tipped to fall 6% and 1% in 2025 and 2026.
For 2025, they predict a full-year payout of 362 US cents per share, down from 402 cents last year. Another drop to 352 cents is predicted for 2026.
But on the plus side, dividend yields for 2025 and 2026 still make mincemeat of the Footsie average of around 3.5% — these are 6% and 5.9%.
Is Rio Tinto a Buy?
As I’ve shown, investing in mining stocks can be a bumpy ride. Earnings are highly sensitive to factors outside of the firms’ control. The process of metals excavation itself is also difficult and fraught with risk.
Yet, I believe holding Rio Tinto shares is worth serious consideration from long-term investors. I continue to hold mine, as I expect industrial metals prices to appreciate significantly over the next decade. The company produces a variety of metals (including iron ore, copper, cobalt, and aluminium) for which demand is tipped to explode.
This is thanks to multiple megatrends like the booming digital economy, rejuvenated defence spending, emerging market urbanisation, and the growing green economy. Rio’s diversified approach gives it a chance to seize each of these opportunities, while simultaneously reducing reliance on one or two commodities to drive growth.
Over the long term, I’m confident the company could prove a lucrative investment.
