Rio Tinto PLC (Rio Tinto) has reported a sharp fall in revenues and earnings for FY 2009, reflecting the impact of grim economic conditions on 1H 09 price realizations. Although we expect y-o-y improvement in metal prices to boost the company's earning in FY 2010, we believe the surge in the ADR price in 2H 09 has raced ahead of fundamentals. Hence despite a positive outlook on the company's financial performance in the coming years…

On 14 October 2009, Rio Tinto PLC (Rio Tinto) released its 3Q 09 production update, which indicates a rising appetite for metals, especially iron ore. As 3Q 09 production numbers were broadly in line with our expectations our outlook for the company remains unchanged. Therefore, we maintain our 6-12 month SELL rating. We will reassess our ADR (1 ADR = 4 UK shares) rating after the company releases its FY 2009 results....

Rio Tinto PLC (Rio Tinto) has revealed a sharp fall in revenues and earnings for 1H 09, reflecting the impact of dour economic conditions on price realizations. Furthermore, although we are likely to raise our earnings estimates based on an improving outlook for metal prices, we still view the ADR as overvalued considering the dilutive effect of the company’s recent rights issue. Therefore, we maintain our 6-12 month SELL rating....