Weaker Iron-Ore Outlook to Curb BHP, Rio Earnings: UBS -- Market Talk
10 July 2014 - 10:15AM
Dow Jones News
2345 GMT [Dow Jones] A cut in UBS's iron-ore forecasts prompts
the bank to trim earnings forecasts for major miners BHP Billiton
Ltd. (BHP.AU) and Rio Tinto Ltd. (RIO.AU). "Given BHP and Rio's
dependency on iron ore... it is no surprise that our earnings
decline by circa 10% plus," analysts write in a note, after
lowering their 2014-2016 iron-ore estimates by as much as 9.6%. UBS
cuts its FY15 EPS expectations for BHP by 9.5%. It cuts Rio's 17%.
It does lift its price target on BHP to A$42.00 from A$41.00, but
lowers Rio's to A$78.00 from A$81.50. Still, UBS retains a Buy
rating on the stocks. "We advocate a defensive positioning in the
sector," the analysts say. "BHP and Rio both fit this bill, in our
view." (rhiannon.hoyle@wsj.com; Twitter: @RhiannonHoyle)
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