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

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Citigroup upgraded Rio Tinto PLC (NYSE: RIO) from Neutral to Buy.

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.

Latest Ratings for RIO

DateFirmActionFromTo
Feb 2015UBSDowngradesBuyNeutral
Feb 2015Morgan StanleyDowngradesOverweightEqual-weight
Feb 2015Credit SuisseDowngradesOutperformNeutral

View More Analyst Ratings for RIO
View the Latest Analyst Ratings

Posted-In: CitigroupAnalyst Color Upgrades Pre-Market Outlook Analyst Ratings

 

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