Join our daily newsletter At The Bell to receive exclusive market insights
Could Rio Tinto (ASX: RIO) be one of the most overlooked opportunities in the Australian stock market right now?
Goldman Sachs certainly thinks so, calling it undervalued and predicting over 20% upside in the next year. Add in a fully franked dividend yield of 5.5%, and it seems like a no-brainer.
But the real story goes beyond valuation and dividends – there’s a shake-up brewing that could send RIO’s share price soaring, and it has to do with listing.
Activist investor Palliser Capital wants Rio to ditch its costly U.K. dual listing, arguing it has drained $50 billion from shareholders. If Rio follows BHP’s lead and consolidates in Australia, it could unlock massive value – just as BHP’s shares jumped over 10% after its restructure in 2022.
Goldman is also bullish on Rio’s growing copper production, expected to outpace BHP. With electrification and infrastructure spending driving demand, copper prices could hit $10,200/t in Q3 2025, boosting RIO’s margins.
Technically, Rio has been trading between $114 and $124 since last October, with strong buying support at the lower end. This range-bound action suggests a buildup of pressure, and a breakout above $124 could trigger a sharp rally toward long-term resistance at $136. Historically, similar breakouts have led to sustained upward moves, however, if $124 holds as resistance, Rio may remain range-bound or retest lower levels before its next major move.
So, with undervaluation, a structural shift, and surging copper demand, Rio looks primed for upside. But will the market wake up to the opportunity?
What are the best and worst-performing sectors this week?
The best-performing sectors include Utilities, up over 1%, followed by Energy, up over 0.5%, and Real Estate, slightly down under 0.5%.
The worst performing sectors include Information Technology, down over 5%, followed by Healthcare, down over 4%, and Discretionary, down over 3%.
The best performing stocks in the ASX 100 include Vivan Energy Group, up over 4%, followed by APA Group and Mineral Resources, both up over 3%. The worst performing stocks include Qantas Airways, down 11%, followed by Flight Centre, down over 9%, and Pro Medicus, down over 8%.
What’s next for the Australian stock market?
Sellers have dominated this week, pushing the All Ords down over 2% and extending its slide to more than 10% from its February peak – officially putting the market in correction territory. But could there be a silver lining?
Historically, outside of COVID-19, a 10% correction often signals the end of a downtrend and the point where buyers step in. What makes this drop particularly interesting is its speed. The last five corrections of this magnitude took at least two months – sometimes up to a year – to play out. This time, it has happened in under four weeks.
Why does that matter? The lack of buyers during the sell-off suggests the recovery could be just as fast. Typically, prolonged corrections unfold in lower waves, with weak buyers meeting strong sellers. But when there are no buyers at all, sharp declines are often followed by equally sharp rebounds.
So, with the market now testing the key 7,900 support level, buyers could soon emerge, creating the potential for a rapid turnaround. If 7,900 holds, those prepared could take advantage of a swift rebound.
If it breaks, then 7,500 is the next major level where buyers may step in.
For now, good luck and good trading.
Join the discussion: See what’s trending right now on Australia’s largest stock forum and be part of the conversations that move the markets.
Disclaimer: While Wealth Within holds an Australian Financial Services License (AFSL:226347) the information featured in this program is general in nature and therefore should not be relied upon. Before making any investment decisions, you should consult a licensed professional who can advise whether your investment decisions are appropriate for you.
Dale Gillham is Chief Analyst at Wealth Within and international bestselling author of How to Beat the Managed Funds by 20%. He is also the author of Accelerate Your Wealth—It’s Your Money, Your Choice, which is available in bookstores and online at www.wealthwithin.com.au.
The material provided in this article is for information only and should not be treated as investment advice. Viewers are encouraged to conduct their own research and consult with a certified financial advisor before making any investment decisions. For full disclaimer information, please click here.
