Shares of iron miner Rio Tinto PLC (RTP) got a boost today after Citigroup analyst Clarke Williams slapped a “Buy” rating on the company’s Australia-listed common shares and a price target of 85 Aussie dollars. The stock was at 67.58 today.
Rio’s American Depository Receipts on the NYSE rose $12.60, or 6.5%, to $206.62.
Williams believes demand for “bulk” commodities will be strong for the next couple of years, and though there’s a risk that actual demand from China for metals is less than apparent demand, especially with signs of Chinese fiscal tightening, nevertheless, the current 20% discount to that inherent value of 85 per share is a level that’s historically been “a good entry point” for getting into Rio shares, writes Williams.
Williams raised his estimate of RTP’s earrings potential for this year by 24% and by 38% for 2011.
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