Berenberg downgrades Rio Tinto, lifts targets for gold miners

(Sharecast News) - Berenberg has downgraded its rating for Rio Tinto as part of its review of the metals and mining sectors as it takes a "more cautious view" on iron ore. The broker has cut its estimates for iron ore pricing by 5% over 2025 to 2027, mainly due to a lack of Chinese stimulus measures. As a result, its rating for Rio Tinto has been lowered from 'buy' to 'hold', with its target price (TP) slashed to just 4,700p from 6,200p.

Analysts highlighted that sentiment surrounding the stock has been dampened by lower lithium prices - following the company's recent big investments in the sector - and the departure of its CEO announced in May.

Glencore (rated 'buy'), which is considering a merger with Rio, is Berenberg's preferred pick in the diversified mining sector, though the broker lowered some forecasts due to weaker coal pricing, leading to its TP being cut to 330p from 380p.

Elsewhere in the sector, Berenberg raised its gold price estimates by 6% for 2025 to $3,220 an ounce and hiked its 2026-27 forecasts by 10% due to ongoing macroeconomic volatility, which will further increase the metal's safe-haven attractions. The broker said the backdrop has been "driven by the Trump administration and its trade policy, which appear to flip-flop from severe tariffs to a more measured approach, and sometimes back again".

"We continue think that value exists in quality precious metals equities. Our favoured large cap picks remain Wheaton Precious Metals, Endeavour Mining and Fresnillo," the broker said. All three stocks are rated 'buy', while TPs for each have been lifted.

Among the other blue chip miners: Berenberg kept a 'sell' on Anglo American after a "challenging" first half amid risks to its restructuring plan; BHP is a 'hold' with the broker highlighting the potential for increased debt and capex guidance; while Antofagasta was left at 'buy' given its high-growth copper business and attractive gold by-product credits.