Rio Tinto Ltd (RIO) Share Trading Recommendation

Rio Tinto Ltd (RIO) have a maintained Buy (1M) share trading recommendation from analyst Citigroup Investment Research (CIR). Underlying NPAT of US$7.34b was below CIR's estimate of US$7.75b and consensus of US$7.5b, driven by costs and provisional pricing impacts. Reported NPAT of US$7.44b was boosted by reversed KUC and IOC impairments offsetting Argyle and Tarong write-downs. Final dividend of US64 cents share was ahead of CIR's and consensus, but failed to excite the market given no special dividend (US$1.10 last year) or additional capital management. There is still US$2.5b left to be utilized through on-market UK buyback in 2007, and CIR have also raised their 2007 dividend by 29%, to US127 cents per share, following the 2006 increase. CIR have trimmed their 2007 and 2008 estimates, by 5% to US$8.15b and US$7.15b, respectively, to reflect the higher-than-expected cost pressures evident in the 2006 result. This has resulted in a reduction in their target price by A$3/share to A$92/share, or £38/share. Whilst the lack of more aggressive returns of excess capital might frustrate the market short-term, and potentially cause share price weakness and expect the continued delivery of earnings growth in 2007 and a copper price recovery in 2H07 to drive the share price higher. Meanwhile, Rio Tinto have a Buy 2 Stock Recommendation and a share recommendation of $95 from analyst UBS. They value the company at $76.89 per share based on 10 percent d.r. UBS think that the outlook for commodities remains strong; and as a result Rio's current trading multiples appear cheap. While key benchmark commodities have corrected over the past quarter, fundamentals have not changed meaningfully. The analysts think some investors may prefer BHP over RIO ahead of the former's results due on Feb 7 but note that RIO still trades at relatively low multiples. Their share price target is based on 11x 07e EPS. They think the 30% increase in the ordinary div to US104cps should be seen as a positive step.

Rio Tinto Limited is listed on the Australian Stock Exchange (ASX) under stock code RIO. You can view their investor website here. The company was listed on the ASX on 1 January, 1970. Leigh Clifford is the CEO and Paul Skinner is the Chairman for this mining resources company. Rio Tinto is a leading international mining group, combining Rio Tinto plc, a London listed public company headquartered in the UK, and Rio Tinto Limited, which is listed on the Australian Stock Exchange, with executive offices in Melbourne. The two companies are joined in a "dual listed companies" (DLC) structure as a single economic entity, called the Rio Tinto Group. The Group finds, mines and processes the earth's mineral resources - metals and minerals essential for making thousands of everyday products that meet society's needs and contribute to improved living standards. Find out the meaning of the recommendations in this primer. Browse for other stockbroker recommendations. You can use Instalment Warrants to trade RIO. Check your charts and good luck with your share trading