This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
Trade Parameters
Technical Observations – For
Technical Observations – Against
Shares bounced off major trendlines, potentially starting to reverse recent 17% sell-off . Copper prices extending rebound from 14-month lows. USD off highs helping metals prices. US-Mexico trade deal offers hope, even if spat continues with China. Strong demand for technology implies demand for metals involved in manufacturing. Broker Liberum (22 Aug) said a “turnaround in China’s property market, even if only temporary, should put a floor under shares in the short term”.
Risks to Rio Tinto shares include a stronger GBP depressing the value of dividends, a more intense trade spat with China, a downturn in global growth sentiment, a fresh strengthening of the USD making metals more expensive, pricey acquisitions and, of course, negative broker commentary/downgrades.
Brokers/analysts are bullish on the shares with only 6% suggesting investors should Sell. This is backed up by 84% seeing upside from current levels to a consensus target of 4253p which is very close to our objective of revisiting July highs.
Next Event: Q3 Operations Review, 16 Oct
Latest Broker 12-Month Consensus: 45% Buy, 48% Hold, 6% Sell (full breakdown on request)
Source: DowJones Newswires, Reuters News, Bloomberg or Company Press releases
| Share | 1wk | 1m | 3m | 6m | 1yr | 2yr | 3yr | 4yr | 5yr |
| Perf % | 1.7 | -11.5 | -11.2 | -5.8 | 3.4 | 57.7 | 74.9 | 11.1 | 22.8 |
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Prepared by Michael van Dulken, Head of Research