Rio, BHP and Glencore All Overvalued say Analysts

Commodity prices may have rallied, and some mining stocks have been upgraded - but they still remain too expensive, say Morningstar equity analysts

Mathew Hodge 15 October, 2018 | 10:34AM

mining stocks are too expensive say Morningstar equity analysts

The global major miners Anglo American (AAL), BHP Billiton (BLT), Glencore (GLEN), Rio Tinto (RIO), Teck Resources, and Vale trade at an average 38% premium to our fair value estimates. Of the major miners, Vale is now the most expensive given its exposure to higher-grade iron ore, which is enjoying premium pricing.

BHP, at a 13% premium to our fair value estimate, are the least expensive of the major miners, reflecting oil exposure where we are relatively more optimistic and less exposure to iron ore relative to Rio Tinto and Vale.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Anglo American PLC1,979.00 GBX0.51
BHP Group PLC1,768.00 GBX0.51
Glencore PLC180.60 GBX-2.38
Rio Tinto PLC5,007.00 GBX0.34

About Author

Mathew Hodge  is an equity analyst for Morningstar

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