(Bloomberg) -- Rio Tinto Plc now has the most buy ratings among European commodities stocks, with analysts expecting a stellar rally driven by Chinese stimulus measures to keep running.
The stock was upgraded to buy at Berenberg on Wednesday, leaving it with sixteen positive ratings — the most among members of the Stoxx 600 Basic Resources index, according to data compiled by Bloomberg. The upgrade followed an 11% rally for the shares in September, their best month in two years, as the mining sector was boosted by a raft of measures by Beijing to boost China’s economy.
“We have missed the first stage of this rally, but think that this demonstration of stimulus goes to show that China will step in to support its economy if needed,” Berenberg analysts led by Richard Hatch wrote in a note, raising their rating on Rio from hold.
The upgrade took Rio’s total buy recommendations above those of other popular commodities picks like ArcelorMittal SA and UPM-Kymmene Oyj, according to the data.
Rio Tinto “will be the medium-term diversified winner versus peers,” the Berenberg analysts wrote. Rio has lower capital costs than hold-rated BHP Group Limited, and less execution risk than sell-rated Anglo American Plc, they added.
--With assistance from Isolde MacDonogh.
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