RIO – Morgan Stanley rates the stock as Equal-weight

By Broker News | More Articles by Broker News

While the free cash flow yield looks attractive, and the company has a balanced and predictable capital allocation strategy, Morgan Stanley believes it is insufficient to warrant an upgrade.

The broker’s commodities team forecasts a rapid decline in iron ore prices from the current US$85/t, to US$70/t by the fourth quarter of 2020.

The broker is concerned that the re-rating in Rio Tinto’s valuation multiple may not be sufficient to offset the magnitude of the downside to earnings.

Morgan Stanley maintains an Equal-weight rating and lowers the target to GBP45 from GBP46. Industry view is In-Line.

Sector: Materials.

Current Price is $94.84. Target price not assessed.

Broker News

About Broker News

FNArena's Australian Broker Call, is your daily news report on the latest recommendation, valuation, forecast and opinions recently published by Stockbrokers.

View more articles by Broker News →