The analysts wrote, ?We believe the market will perceive today?s write-downs and management changes negatively in the short term, but that these will be positive for the stock and the sector longer term. One of our structural bearish criticisms of the sector has been poor capital allocation, and lack of shareholder focus. We believe today?s announcement could significantly realign Rio Tinto with shareholder interests through reduced M&A and reduced capex spend. Due to today?s impairments, we have removed the large discount to NPV we previously applied for poor capital allocation (we now apply a 15% discount vs. 40% previously).? Rio Tinto traded down 0.16% on Thursday, hitting $54.9399. Rio Tinto has a 1-year low of $41.59 and a 1-year high of $63.18. The stock?s 50-day moving average is currently $55.03. The company has a market cap of $101.4 billion and a price-to-earnings ratio of 25.17.
Other equities research analysts have also recently issued reports about the stock. Analysts at Morgan Stanley downgraded shares of Rio Tinto from an ?overweight? rating to an ?equal weight? rating in a research note to investors on Wednesday. Separately, analysts at Macquarie downgraded shares of Rio Tinto from an ?outperform? rating to a ?neutral? rating in a research note to investors on Friday, January 11th. Finally, analysts at Goldman Sachs initiated coverage on shares of Rio Tinto in a research note to investors on Thursday, December 6th. They set a ?neutral? rating on the stock.
Seventeen equities research analysts have rated the stock with a buy rating, two have given an overweight rating, four have assigned a hold rating, and one has assigned an underweight rating to the company. The stock currently has an average rating of ?overweight? and an average price target of $63.58.
Rio Tinto Plc (Rio Tinto) is an international business involved in each stage of metal and mineral production.