Mining: Sharp dip uncovers value

About the author:

Adrian Prendergast
Author name:
By Adrian Prendergast
Job title:
Senior Analyst
Date posted:
17 August 2023, 7:30 AM
Sectors Covered:
Mining, Energy

  • The ASX 200 Materials index is down 7% in the last month, with large-caps leading the selloff (BHP -5%, RIO -12%, FMG -11%, MIN -14%, S32 -7%, IGO -20%).
  • Broad weakness, contributed to by the ongoing malaise in China growth indicators, has in some cases boosted the value proposition on some key picks.
  • We upgrade our recommendation on RIO to Add (from Hold), gaining conviction on an improved performance from its flagship Pilbara iron ore business.
  • This reporting season will likely see reduced yoy earnings and dividends, but in some cases (like S32) not as bad as we expected post recent quarterly results.

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