Rio Tinto will be releasing its 2020 interim financial results on July 29.
UBS expects earnings to decline -6% year on year driven by declining commodity prices. The biggest decline is likely to be from the copper and diamonds products group which is expected to post a loss for the half.
Interim dividend of US$1.42 per share is expected, in-line with the previous pay-out ratios. The miner’ announced capital expenditure for 2020 to be circa -US$6bn, driven by a weaker US dollar and less than expected impact from covid-19.
There are risks to the timeline and budget due to covid-19 driven restrictions on mobility, notes the broker.
UBS retains its Neutral rating with a target price of $102.
Target price is $102.00.Current Price is $102.89. Difference: ($0.89) – (brackets indicate current price is over target). If RIO meets the UBS target it will return approximately -1% (excluding dividends, fees and charges – negative figures indicate an expected loss).