In the last one year, Rio Tinto (NYSE: RIO) stock has only moved sideways, gaining only 1% in the last one year. Compare this to the S&P500 index, which is up 14% in this time. So, let’s be honest—doubling in a giant like Rio isn’t easy. We’re talking about a $100+ billion global mining heavyweight that’s already one of the biggest players in iron ore, copper, and aluminum. But… what if something huge came along and lit a serious fire under the stock?
If there’s one thing that could truly supercharge Rio’s stock, it’s a major breakthrough in lithium production and scaling. Right now, Rio has its eye on the energy transition with some exposure to lithium, but it’s still a tiny slice of its business. Most of Rio’s revenue comes from iron ore—great for now, but not exactly the future-facing buzzword that gets markets giddy. While Rio stock has been flat, if you seek upside with lower volatility than individual stocks, the Trefis High Quality portfolio presents an alternative – having outperformed the S&P 500 and generated returns exceeding 91% since its inception.
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Rio Tinto trades with a trailing P/E around 8.5x currently—well below its 13‑year median of 10x, and far lower than typical industry peers that average 13–14x. Its forward P/E is roughly 10×, signaling modest near-term growth expectations. But if Rio cracks the code on low-cost, large-scale lithium extraction, it can become a top-tier global lithium supplier right as EV demand soars through 2030. That kind of shift could send valuation multiples flying higher.
Why It Matters
EV batteries, solar storage, grid upgrades—you name it. Lithium is the oil of the clean energy age, and countries around the world are scrambling to secure supplies. If Rio becomes a dominant, reliable source—especially outside China—it could become strategically critical, which investors love. Plus, lithium fetches higher margins than bulk commodities like iron ore. That means fatter profits, which implies potential multiple expansion.
Is It Just a Dream? Not entirely. Rio already has the capital to scale fast, the infrastructure and logistics know-how along with a decent foothold in key regions (Serbia, Argentina, even the U.S.) If the company can turn its lithium ambitions into a full-blown growth engine, the market could reward it in a big way.
So, could Rio stock double? Not off iron ore alone. But if it transforms into a clean-energy materials company, with lithium leading the charge, we’re talking a whole new valuation story.
Not too happy about the volatile nature of RIO stock? The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
