- Rio Tinto (NYSE:RIO) -1.8% premarket after RBC downgrades shares to Outperform from Top Pick; the stock drops as much as 2% in London trading.
- RBC foresees a slowing Chinese property market and concerns on growth to increase following the Communist Party leadership conference in November, which "may weigh on sentiment, meaning an ‘iron ore’ fundamentals re-rating pushed out to later in 2018."
- RBC remains positive on the sector and the iron ore market; the firm's Rio downgrade is reflective of an increasingly positive relative view on Anglo American (LON:AAL) (OTCPK:AAUKF, OTCPK:AAUKY), where there is “a larger valuation disconnect,” and Glencore (LON:GLEN) (OTCPK:GLCNF, OTCPK:GLNCY), where there is “a dynamic growth story evolving.”
- Rio's 8% total dividend yield "should underpin investment demand and continue to see Rio Tinto attract investor interest going forward," RBC writes.
- Now read: Nevsun Resources: Copper/Zinc Catalysts Ahead
Original article