RIO – Citi rates the stock as Buy

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Citi analysts take their clientele to Memory Lane, the good old days of the 1980s and 1990s when Rio Tinto was the world’s pre-eminent mining company. Oh how things have changed since.

Is it possible for the company to regain that position? Citi analysts believe the answer lies not with more acquisitions, and neither should today’s large exposure to iron ore prove an insurmountable barrier.

The solution, the analysts suggest, lies with maintaining conservative gearing ratio’s and returning cash to shareholders. Buy rating retained, as well as the $70 price target.

Sector: Materials.

Target price is $70.00.Current Price is $62.10. Difference: $7.90 – (brackets indicate current price is over target). If RIO meets the Citi target it will return approximately 11% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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