RIO – Citi rates the stock as Buy

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The company has an agreement with EMR Capital and PT Adaro Energy to sell its 80% interest in the Kestrel mine for US$2.25bn. Citi expects Rio Tinto to return the post-tax net sale proceeds to shareholders once the deal is closed in the second half.

The transaction marks the exit of coal assets for Rio Tinto. Target price is $82. Buy.

Sector: Materials.

Target price is $82.00.Current Price is $73.39. Difference: $8.61 – (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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