ASX-listed companies Rio Tinto (AU:RIO) and Bank of Queensland Limited (AU:BOQ) will report their next earnings this week. Ahead of their results, both stocks have received mixed opinions from analysts, who have given them Hold ratings.
Pick the best stocks and maximize your portfolio:
- Discover top-rated stocks from highly ranked analysts with Analyst Top Stocks!
- Easily identify outperforming stocks and invest smarter with Top Smart Score Stocks
Let’s have a closer look at them.
Rio Tinto Limited
Rio Tinto is a global mining company with a diverse product portfolio of iron ore, lithium, diamonds, copper, and more.
The company will announce its first-quarter earnings for 2023 on April 19. In its full-year results for 2022, the company suffered a blow to its profits due to weaker demand from China and rising costs. The company also reduced its dividend by more than 50%, to $4.92 per share.
The company stated that with China coming out of lockdown, demand has shown some signs of revival. For 2023, the company’s forecasted capital investment is $8 billion, which will increase to $9–10 billion over the next two years.
The analysts, on the other hand, have mixed opinions on the upcoming earnings and the stock.
RBC Capital’s analyst Kaan Peker believes that the industry is struggling from shrinking margins, and the higher capex will further put pressure on the cash flow. Peker has a Hold rating on the stock and sees around a 20% downside in the share price.
On the contrary, analyst Paul Young from Goldman Sachs has a Buy rating on the stock and is optimistic about the “production growth outlook.”
Is Rio Tinto a Good Stock to Buy?
According to TipRanks consensus, RIO stock has a Hold rating, based on a total of 12 recommendations.
The average target price of AU$119.23 suggests a downside of 1.15% on the current share price.
Bank of Queensland Limited
The Bank of Queensland is a regional bank with more than 160 branches in Australia.
The bank will release its interim earnings for the fiscal year 2023 on Thursday, April 20. According to TipRanks, the forecasted EPS is AU$0.38 per share, which is similar to the EPS of the same quarter last year.
Recently, the bank’s shares were in the news after they went down by 1.5% in the last five days. The shares were hit after the bank announced that it would report lower profits of AU$4 million for the first half of 2023, as compared to net profits of AU$212 million in H1 2022. This is mainly due to a write-down of AU$260 million in earnings.
Due to lower profits, the bank might also cut its interim dividend to AU$0.20 per share, down from the final dividend of AU$0.24 per share in 2022.
Bank of Queensland Share Price Target
The average price target of AU$7.01 indicates a growth of 10.41% in the share price of the bank.
Overall, BOQ stock has a Hold rating on TipRanks, based on four Hold, three Sell, and two Buy recommendations.
Conclusion
Rio Tinto has mixed views on its upcoming results based on expected favorable demand from China but also higher pressure on profit margins.
As for the Bank of Queensland, analysts remain worried about the lower expected profits for the bank, which could also impact income investors.
