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Tuesday preview: Rio Tinto expected to update on wall slide

April 15 2013, 6:30pm
Rio Tinto is the only stock worth buying among the large-cap UK diversified mining companies, according to Citigroup.

Rio Tinto (LON:RIO) gives a trading statement just days after it revealed that operations at Kennecott Utah Copper's Bingham Canyon Mine have been suspended after a wall major pit wall failure.

Deutsche Bank's initial estimate is that it will take six to 12 months before production can recommence at the mine, which could cost the company up to US$600mln or thereabouts, equivalent to about 6% of projected 2013 earnings if the mine is off-line for the entire year.

The bank is expecting an update on the incident with Tuesday's statement from Rio.

If it is any consolation, Rio Tinto is the only stock worth buying among the large-cap UK diversified mining companies, according to Citigroup.

"The company is into the self-help zone and fits our spin, shrink and grow thesis. The company selling assets, cutting capex, and increasing free cash flow, which could see the company trading on a free cash flow yield of 15% by 2016," Citi says. The broker has a £40 price target for Rio.

The stock is also JP Morgan's top pick in the sector.

Michael Page (LON:MPI) is the latest recruiter to give a first quarter trading update.

Shore Capital reckons net fee income will be down 7% year-on-year to £126.5mln.

Michael Page's UK business has been subdued, but may be about to turn the corner, but Continental Europe is likely to remain a scary story.

Peel Hunt notes that the company is up against some tough comparatives in Brazil, while things down under may be bleak.

"Implementation of new IT is to start in 2013, which may cause some disruption, and investors will see the results of an executive management overhaul," Peel Hunt said.


Significant announcements expected

Companies: MP Evans, Perform Group (AGM), Telecity Group (AGM), Michael Page Group, Rio Tinto

Macroeconomic: Reserve Bank of Australia policy meeting, UK producer prices, UK house prices, UK consumer & retail prices, Eurozone consumer price index, German ZEW surveys of: current situation; economic sentiment, US consumer prices, US housing starts, US industrial production & capacity utilisation, US manufacturing production


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