latest ratings

UBS 02/09/2009 1 Buy $72.50 23.5%
Commodity price assumption increases, particularly to metals, iron ore and coking coal, see UBS lifting its 2010 earnings forecasts by 30% and 2011 by 12%.

UBS expects Rio to outperform BHP ((BHP)), as it offers 4x the leverage to aluminium and 2x the leverage to iron ore.

Target rises $6.50 to $72.50.

Macquarie 28/08/2009 1 Outperform $66.10 16.1%
The broker has spent some time digesting Rio's result and has decided that while cost cuts lead to slight earnings upgrades, it is apparent that prior to the GFC Rio was simply being "run for cash" rather than longer term growth and diversity.

The broker retains Outperform expecting further increases in commodity prices and raises the target from $63.89 to $66.10. But it prefers the safer BHP ((BHP)).

BA-Merrill Lynch 24/08/2009 1 Buy, Medium Risk $71.86 22.8%
The H109 interim numbers from Rio Tinto were a little short of Merrills' forecasts, but the broker isn't worried.

The Buy call is maintained, with the broker thinking the company's iron ore, copper and energy divisions offer good exposure to Merrill's improving view on commodity prices and an economic recovery in 2010.

Says the broker: the stock "presents compelling value vs. its peers" given it is trading at 10x 2010 EPS.

Credit Suisse 24/08/2009 3 Neutral $68.00 18.5%
Rio Tinto's interim result proved below market, and CS, expectations, but the broker has nevertheless elected to retain its Neutral rating and $68 price target.

The analysts are cautious for the short term, but maintain a strong belief that Rio Tinto has the strongest leverage into an economic recovery of all diversified major resources companies.

Deutsche Bank 24/08/2009 1 Buy $62.85 11.8%
Not quite as good as its rival, but if you adjust for accounting vagaries the broker believes Rio actually beat consensus. Deleveraging continues and aggressive cost cuts are creating a leaner company with clearer growth options, the broker suggests.

The broker has ticked up forecast earnings and target on cost cutting.

RBS Australia 24/08/2009 3 Hold $61.94 10.5%
With the broker no longer restricted on the stock it returns to a Hold rating post the interim profit result, noting the earnings performance largely met its expectations.

With forecasts in line with consensus through 2010 the broker sees the stock as fair value at current levels, which supports its Hold rating.

JP Morgan 21/08/2009 3 Neutral $57.46 3.5%
Target $57.46 (was $57.82). Interim earnings were slightly disappointing according to the broker and results in a small decline in its price target for the stock.

Neutral rating is retained.

Citi 21/08/2009 1 Buy, Medium Risk $68.00 18.5%
Rio Tinto's interim result disappointed but that was then and the future should be brighther, argue Citi analysts. Hence why they are happy to stick with their Buy rating in combination with a $68 price target.

Probably the best way to illustrate the analysts' optimism is the fact that, for now, the 2009 profit estimate for the company has been lowered by 4% to US$4.4bn. But, note the analysts, at present spot prices the profit forecast would actually rise by about 20%.

Another positive is that after the shenanigans with the Alcan-deal debt, Rio Tinto can finally concentrate on growth options again. Suggest Citi analysts.