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Rio Tinto: Société Générale upgrades to buy.

(CercleFinance.com) - As part of a report on European mining stocks, Société Générale (SG) has upgraded its “hold” rating on the British Rio Tinto share to “buy”.

Analysts have adopted "a more constructive stance on iron ore". They have therefore raised their 12-month target price for the share from 3,600 pence to 4,400 pence, meaning upside potential of around 16%.

"Sunshine over Pilbara," SG writes, referring to the huge iron mining complex that the group owns in northwestern Australia. SG's report indicates that its forecast for iron ore prices of 45 dollars per tonne now seems to be too conservative "in the context of stronger-than-expected Chinese demand and improving supply discipline,” SG's report states.

SG does not rule out that in the near term the price of iron ore is under pressure, due to the seasonal nature of demand, but considers that this could provide an opportunity for investors to increase their stakes in Rio Tinto.

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