I am assigning Rio Tinto Group (NYSE:RIO) a positive risk/reward rating based on its leverage to Asian economic growth, its peer-leading copper growth potential, a robust outlook for the global aluminum market, and its asymmetric risk/reward profile. The downside is supported by a 10-year technical base and a discounted valuation, while the upside is bolstered by a structurally bullish supply and demand balance for industrial metals.
Risk/Reward Rating: Positive
Rio Tinto is among the world’s leading producers of iron ore and aluminum and offers one of the highest copper growth profiles amongst its peers. As a result, the investment case for Rio Tinto hinges on the global supply of and demand for these critical industrial commodities, as well as Rio Tinto’s competitive positioning.
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