Macquarie expects first half underlying earnings of US$4.8bn and iron ore is expected to account for around 60%. Net debt is expected to remain around US$4bn and, as cash from asset sales is still pending, an increase in the buyback is considered unlikely.
Rio Tinto will release its first half results on August 1. Target price of $94 and Outperform rating maintained.
Target price is $94.00.Current Price is $80.45. Difference: $13.55 – (brackets indicate current price is over target). If RIO meets the Macquarie target it will return approximately 14% (excluding dividends, fees and charges – negative figures indicate an expected loss).