UPDATE: Citigroup Upgrades Rio Tinto PLC to Buy on Management Changes, Valuation

Citigroup upgraded Rio Tinto PLC

from Overweight to Equal-weight. Citigroup noted, "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 PLC closed at $55.03 on Wednesday.