Broker tips: Rio Tinto, Ashtead Technology
By Iain Gilbert
Date: Thursday 16 Jul 2026
(Sharecast News) - Analysts at Berenberg cut their price target on Rio Tinto from 8,200p to 8,100p on Thursday, saying higher‑than‑expected diesel costs in the Pilbara were likely to keep unit‑cost pressure elevated, while parts of the miner's Q2 production update pointed to downside risks in iron ore.
Berenberg said Rio Tinto's Q2 numbers were a mixed bag, with production guidance left unchanged across commodities, but Pilbara unit costs rising $0.80 per tonne year‑on‑year in the first half due to elevated diesel prices.
Copper C1 cost guidance was lowered to $0.30 to $0.50 per pund, helped by strong gold prices, while Rio flagged a $1.2bn working‑capital cash outflow tied to rising iron‑ore inventories and a $443m tax outflow in Mongolia.
Copper output of 213,000 tonnes was slightly below Berenberg's forecast, mainly due to a weaker quarter at Kennecott, where a furnace breach caused an unplanned outage, while iron ore was mixed, with Pilbara production and shipments marginally ahead of estimates, but IOC delivering just 2.9mt versus the broker's 4.2mt forecast, creating potential downside to full‑year guidance.
Rio Tinto delivered first lithium tonnes from Fénix 1B and Sal de Vida, but a development decision on the Nemaska Lithium project was pushed to the second half as the review continues.
Berenberg updated its model following the Q2 report, trimming its target price and keeping a 'hold' rating, noting Rio trades at 1.38x net asset value and 5.7x FY26 underlying earnings.
RBC Capital Markets said first‑half trading at Ashtead Technology was solid, but slightly softer margins linked to ongoing Middle East and Asia disruptions prompted the broker to trim its estimates.
Ashtead expects H126 revenues of £100.2m, broadly in line with the £102m consensus, but activity weakness in the Middle East and APAC pushed adjusted underlying earnings and EBITA margins down to 37.8% and 25.0%, below typical first‑half levels. Capex was weighted to H1, nudging leverage up to 1.4x, though the group still expects to finish FY26 below 1.0x.
Guidance was left unchanged, with management assuming Middle East operations normalise and expecting single‑digit revenue and EBITDA growth for the year.
RBC, which reiterated its 'outperform' rating and 560p price target, trimmed its FY26 numbers to reflect lower contribution from higher‑margin Middle East work.
The Canadian broker said record backlogs among Ashtead's largest oil and gas customers, scheduled for execution through 2026-29, underpin a sustained period of offshore activity.
Low breakeven economics and large offshore resources should support continued project sanctioning, providing a favourable backdrop for pricing and margin improvement, added RBC
Ashtead trades on a 4.8x FY27 enterprice value/EBITDA ratio, with RBC's 560p target based on a 6.0x multiple in line with wider offshore services peers.
Reporting by Iain Gilbert at Sharecast.com
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN