Rio Tinto (ASX: RIO) has a strong outlook with respect to cashflow and dividends, but iron ore price weakness is causing uncertainty
Gavin Wendt
MineLife
Rio Tinto (ASX: RIO) has a strong outlook with respect to cashflow and dividends, but iron ore price weakness is causing uncertainty. UBS said today in a research note that it is positive on Rio due to improving free cashflow and the potential for a ~$4bn buy-back during February 2015, but iron ore prices remain a key concern. UBS expects cashflow to improve materially during 2015/16 on lower capex/costs, and higher volumes. However the iron ore price, which has fallen by 30% in 2014 from $135/t to $95/t, is the major concern. The issue of earnings diversity is also a concern from our perspective, with 85% of Rio's earnings coming from iron ore (BHP around 50%).
Never miss an update
Enjoy this wire? Hit the ‘like’ button to let us know.
Stay up to date with my current content by
following me below and you’ll be notified every time I post a wire
Gavin has been a senior resources analyst following the mining and energy sectors for the past 25 years, working with Intersuisse and Fat Prophets. He is also the Executive Director, Mining & Metals with Independent Investment Research (IIR).
3 topics
Gavin Wendt
Founding Director
MineLife
Gavin has been a senior resources analyst following the mining and energy sectors for the past 25 years, working with Intersuisse and Fat Prophets. He is also the Executive Director, Mining & Metals with Independent Investment Research (IIR).
Expertise
Gavin Wendt
Founding Director
MineLife
Gavin has been a senior resources analyst following the mining and energy sectors for the past 25 years, working with Intersuisse and Fat Prophets. He is also the Executive Director, Mining & Metals with Independent Investment Research (IIR).
Expertise
Comments
Comments
Sign In or Join Free to comment
most popular
Equities
Why "buy and manage" is the better way to invest in stocks
Livewire Markets
