Rio Tinto plc (ADR) RIO ticked up on Thursday after revealing stronger-than-expected results and plans for a $2 billion buyback.
The British-based iron miner closed up nearly 2 percent at $276.72.
Credit Suisse's James Gurry, though, downgraded Rio to Neutral, from Outperform, citing continued risk to ore prices and limited potential stock-price gains.
Goals set by Rio two years ago have been met, with a revived balance-sheet strength, improved cash flow and "returns to shareholders en-route," Gurry said, suggesting few additional catalysts for Rio's share price.
Prospects look dim for a revival of Swiss-based Glencore PLC GLEN's rejected takeover attempt of Rio Tinto, Gurry said, citing a divergence in share prices.
In October, Rio conclusively rejected a merger from Glencore; the company is barred by British rules from making another approach until April.
With iron ore at $63 per tone -- the lowest level since 2009 -- Gurry expects its price to remain flat in 2015.
"It's difficult to construct a particularly bullish view on iron ore," the analyst concluded.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
date | ticker | name | Price Target | Upside/Downside | Recommendation | Firm |
---|
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.