Analysts’ Latest Upgrades and Downgrades for Rio Tinto


Dec. 28 2018, Updated 7:32 a.m. ET

Analysts’ ratings for Rio Tinto

Of the 16 analysts covering Rio Tinto (RIO) stock, 62.0% have given it “buys,” 25.0% have given it “holds,” and 13.0% have given it “sells.” Its ratings have remained more or less the same for the last few months.

Of the analysts covering BHP Billiton (BHP) and Vale (VALE) stocks, 39.0% and 78.0% have given them “buys,” respectively. Cleveland-Cliffs (CLF), which is mainly exposed to the US domestic market, has “buy” recommendations from 64.0% of the analysts covering its stock. Analysts generally expect its premium to come down compared to those of its peers due to the lack of any significant catalysts.

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Upgrades and downgrades

Credit Suisse (CS) downgraded Rio from an “outperform” to a “neutral” on December 13.

In contrast to CS’s view, CLSA upgraded Rio from an “outperform” to a “buy” on December 5. The broker cited the sell-off in shares and a review of its Oyu Tolgoi investment agreement as the reasons for the upgrade.

JPMorgan Chase maintained its “overweight” rating on Rio Tinto in a note on December 6. The analyst feels that Rio is cheaper than BHP on a number of valuation metrics after a run-up in BHP’s stock price recently.

Société Générale and Goldman Sachs

On October 24, Société Générale downgraded Rio stock from a “buy” to a “hold.” The company adjusted its short-term commodity price assumptions and cut them for base metals (DBB) while it raised them for bulks. The analyst was cautious about Rio due to its high iron ore exposure.

Goldman Sachs (GS), on the other hand, upgraded the stock from a “neutral” to a “buy” on October 9. GS analyst Paul Young believes that Rio’s capital discipline provides the company with sustainable high free cash flow. He also likes the company’s efforts to sell its noncore assets, cut costs, and reduce its net debt, all of which he thinks warrant a superior multiple to those of most of its global peers.


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