Citigroup Downgrades Miners as Commodity Prices Slump (XME) (GOLD) (BHP) (RIO)
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Rating Summary:
13 Buy, 13 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 8 | New: 12
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As a result of the reduction in commodity price forecasts, Citigroup lowered earnings estimates for global mining companies. 2013 and 2014 commodity price forecasts are lower by 5-10 percent on average for base metals, say analysts at Citigroup. Among base metals, aluminum forecasts are in the worst shape, with nickel, and copper also seen lower.
The forecast for most precious metals prices aren't much better, with rhodium seen lower by 25.8 percent and palladium lower by 13 percent. Silver is the only standout in precious metals, and is expected to rise by 7 percent.
In response to expected lower commodity prices, 2012-2014 earnings estimates were reduced by 6-23 percent for the bigger diversified miners, and earnings for base metal producers are being cut 6-20 percent.
Citi downgraded Centamin and Petropavlovsk to Neutral from Buy. Polymetal and Randgold (Nasdaq: GOLD) were downgraded to sell from neutral.
BHP Billiton (NYSE: BHP), Rio Tinto (NYSE: RIO), and African minerals are the preferred companies in the space, say analyst at Citigroup.
SPDR S&P Metals & Mining (NYSE: XME) is trading lower by 1.85 percent intraday on Monday.
The forecast for most precious metals prices aren't much better, with rhodium seen lower by 25.8 percent and palladium lower by 13 percent. Silver is the only standout in precious metals, and is expected to rise by 7 percent.
In response to expected lower commodity prices, 2012-2014 earnings estimates were reduced by 6-23 percent for the bigger diversified miners, and earnings for base metal producers are being cut 6-20 percent.
Citi downgraded Centamin and Petropavlovsk to Neutral from Buy. Polymetal and Randgold (Nasdaq: GOLD) were downgraded to sell from neutral.
BHP Billiton (NYSE: BHP), Rio Tinto (NYSE: RIO), and African minerals are the preferred companies in the space, say analyst at Citigroup.
SPDR S&P Metals & Mining (NYSE: XME) is trading lower by 1.85 percent intraday on Monday.
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