MARKET TALK: Rio FY10 Earnings Cut 11% On Weaker Commodities -CS

19th Jul 2010 00:15

2314 GMT [Dow Jones] Credit Suisse slashes Rio Tinto (RIO.AU) earnings forecasts by 11% in FY10, 19.5% in FY11 and FY12, thanks to downward revisions in iron ore, copper, aluminum, AUD/USD. Target price down to A$85 from A$100 vs A$65.03 close yesterday, but Outperform rating retained as stock "remains attractively valued", p/e ratios of 8X in 2010 and 6.6X in 2011; U.K. listing more attractive, 2010 p/e at 6.4X, 5.3X next year. Sees most catalysts as positive: further capex in Pilbara good for iron ore, Oyu Tolgoi investment for copper, while any failure of Pilbara JV with BHP Billiton (BHP.AU) likely relatively better for Rio. ([email protected]) Contact us in Singapore. 65 64154 140; [email protected] (END) Dow Jones Newswires July 19, 2010 19:15 ET (23:15 GMT)