Morgan Stanley rates RIO as Equal-weight

Published: 2025-06-09 22:29:05 ET MS

Published on 06/09/2025 at 22:29

Morgan Stanley highlights Rio Tinto's Jadar lithium project in Serbia has been included in the EU's updated list of strategic raw material projects. This potentially unlocks development support and financing from the European Commission, explain the analysts.

The broker expects revised cost estimates for the project, which was previously halted due to regulatory issues but could restart with development beginning in 1H 2026 and production by 2030.

Jadar is modeled by the analysts to produce circa 58ktpa of lithium carbonate and generate a project NPV of US$3.9bn. Morgan Stanley conservatively attributes 25% of this value (US$1bn or $1.10/share) in its base case to reflect ongoing approval risks.

The broker retains an Equal-weight rating and a $119.50 target price. Industry View: In-line.

Sector: Materials.

Target price is $119.50.Current Price is $109.81. Difference: $9.69 - (brackets indicate current price is over target). If RIO meets the Morgan Stanley target it will return approximately 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).