Rio Tinto Group has received a significant vote of confidence from analysts as Erste Group upgraded the mining giant from Hold to Buy on January 23, positioning it among the best undervalued European stocks to buy now. The upgrade reflects growing optimism about the company’s financial performance and production capabilities, particularly in copper mining operations. According to analyst Hans Engel, Rio Tinto’s superior return on equity compared to competitors makes it an attractive investment opportunity in the current market.
The mining company operates across multiple business segments including Copper, Iron Ore, Aluminium, and Minerals, exploring and processing mineral resources globally. Erste Group’s analyst highlighted that Rio Tinto’s sales are expected to grow more strongly in 2026 than in the previous year.
Copper Production Drives Growth Prospects
A key factor behind the positive outlook for Rio Tinto stock centers on copper production in Mongolia, which analysts believe will provide an important contribution toward the company’s expansion plans. The firm also noted that silver production will rise in tandem with copper output, further bolstering growth prospects. This dual production increase represents a strategic advantage as global demand for these metals continues to strengthen.
Additionally, Rio Tinto met its 2025 production targets across all commodities, demonstrating strong operational execution. The company’s copper output reached 883,000 tonnes, beating the upper end of its projection range of 875,000 tonnes, according to the report.
Record Iron Ore Performance Strengthens Position
Beyond copper, Rio Tinto achieved record quarterly iron ore output in Western Australia’s Pilbara region during the fourth quarter. Production increased 4% compared to the same period in 2024, showcasing the company’s ability to optimize operations in one of its core business segments. This performance in iron ore production adds another dimension to the investment case for undervalued European stocks like Rio Tinto.
However, the mining sector faces ongoing challenges including commodity price volatility and geopolitical uncertainties that could impact future performance. Despite these headwinds, analysts appear confident in Rio Tinto’s operational efficiency and diversified portfolio.
Superior Returns Draw Analyst Attention
The upgrade from Erste Group specifically emphasized Rio Tinto’s superior return on equity metrics when compared to industry peers. This financial strength indicates effective management of shareholder capital and operational efficiency. Meanwhile, the company’s ability to exceed production targets while maintaining quality returns suggests a well-executed business strategy.
In contrast to some competitors facing production challenges, Rio Tinto’s consistent performance across multiple commodity segments provides investors with diversification benefits. The company’s presence in copper, iron ore, aluminium, and other minerals reduces concentration risk compared to single-commodity miners.
Furthermore, the anticipated increase in copper and silver production from Mongolian operations could serve as a catalyst for revenue growth in 2026 and beyond. These metals remain critical to global infrastructure development and the energy transition, supporting long-term demand fundamentals.
Investors will be watching for Rio Tinto’s detailed 2026 guidance and production updates to confirm whether the company can deliver on analyst expectations for stronger sales growth. The timing and scale of production increases in Mongolia, along with continued iron ore performance, will likely determine whether the stock lives up to its classification among the best undervalued European stocks in the coming quarters.
