Stronger Iron Ore Price Outlook Helps Rio Tinto

We've increased our fair value estimate for Rio Tinto based on our higher iron ore price forecast for 2011 and 2012

Mark Taylor 29 December, 2010 | 11:08AM
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Fair Value Estimate: 5000p | Uncertainty Rating: Medium | Economic Moat: Narrow

Thesis (Last updated 21/12/10)

Rio Tinto (RIO) is a top-tier global miner along with BHP Billiton (BLT), Brazil's Vale (VALE), and UK-based Anglo American (AAL). A world-class asset base and capable management make Rio one of the few miners to earn more than its cost of capital through the commodity cycle. Geographic and product diversification give Rio relatively stable cash flows and lower operating risk than many of its mining peers. Most revenue comes from the relative safe havens of Australia, North America, and Europe, though operations span six continents.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Rio Tinto PLC4,796.50 GBX-0.70Rating

About Author

Mark Taylor  is an equity analyst at Morningstar.

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