Rio Tinto share price has been under intense pressure for the past few days ahead of the company’s full-year earnings report. The stock ended Wednesday’s trading session 1.51% higher at A$123.33. The Australian mining company has a total market cap of A$175.498 billion.
Earnings Ahead
Rio Tinto share price has been on a slow decline for the past few days ahead of its earnings report. The company’s low valuation reflects the tough macroeconomic environment. Profits at companies such as Rio Tinto are usually at risk during periods of weak growth.
However, despite the faltering outlook, investors seem quite optimistic about the stock. With rising demand for metals and energy commodities, experts think that consumption might rocket over the next decade, boosting profits growth for miners such as Rio Tinto.
The world’s second-largest metals and mining corporation is set to release its full-year results on 22nd February. Analysts at Goldman Sachs expect the mining giant to report an operating profit a touch ahead of analysts’ consensus estimates.
Analysts are anticipating a $26.8 billion EBITDA, slightly higher than the $26.7 billion consensus estimate. This will be boosted by the better-than-expected copper and minerals revenue. However, a weaker-than-consensus aluminum EBITDA is expected to offset some of the gains due to higher costs.
Rio Tinto Share Price Forecast
The daily chart shows that the Rio Tinto share price has been on a slow downward trend for the past few days. Along the way, it formed a descending channel (shown in purple). Even so, it has managed to remain above the 50-day and 200-day exponential moving averages. Its Relative Strength Index (RSI) has dropped but remains above the neutral level.
Therefore, I expect the RIO stock price to have a bullish breakout in the medium term as buyers eye this month’s high at A$128.85. However, a move below the important support at A$120 will pull the stock price lower to find support at A$112.70.
