Credit Suisse Downgrades Rio Tinto; Sees No Catalysts

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.

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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.