Investec says Rio Tinto is preferred pick among diversified miners

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Sharecast News | 18 Oct, 2017

Updated : 17:08

Analysts at Investec reiterated their "preference" for shares of Rio Tinto among the diversified majors, despite the miner's "mixed" third quarter results.

The main arguments put forward to back up their case were the company's balance sheet, which was the strongest in the sector and its clear focus on shareholder returns.

As evidence of the latter, they pointed to the outfit's $2bn interim dividend and the $4bn of share buybacks unveiled thus far in 2017.

Linked to those buybacks, the analysts raised their estimates for the company's earnings per share in fiscal years 2017 and 2018 by 3.6%, on average.

Regarding the company's mixed production results for the third quarter, Investec said they only resulted in "modest" changes to its EPS estimates, with that for 2017 reduced by 1.9% and those for the subsequent two years being trimmed by less than 1%.

Investec kept its 'buy' recommendation and 4,225p target price for the shares.

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