S&P Capital IQ Reiterates its STRONG BUY Rating on Rio Tinto ADSS, Target Price Reduced

October 14 00:00 2011

NEW YORK, October 14 (RainbowNewsLine.com) – Analyst Leo Larkin of S&P Capital IQ reiterates his STRONG BUY rating on the ADSS of Rio Tinto Plc ( NYSE: RIO), while adjusting his estimates for the company. The 12-month target price has been reduced from $92 to$81.

Analyst Leo Larkin, in a research note published yesterday mentions that a Q3 report suggests that the fundamentals of bulk traded commodities is holding up and the company is able to sell whatever it is producing. The report applies to iron ore mostly and continues to benefit from increased global steel production, the analyst says. The EPS estimate for 2011 has been raised from $9.25 to $9.42 due to the positive outlook on iron ore caused by rising global steel production.  The EPS estimate for 2012 has been reduced from from $9.08 to $9.05 on lower copper price assumptions. The target price is reduced in order to reflect lower sector multiples and revised 2012 estimates.

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