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As the probability of further rate hikes in the US this year has reduced, so has the value of the US dollar, lending itself to much improved commodity prices, particularly for base metals. Recent PMI (manufacturing and construction) data out of China suggesting further industry expansion, follows better-than-expected second quarter GDP data out of the region as well, furthering an improved demand-side sentiment for resources and in turn diversified mining companies. But is there still upside to be realised within this space?
In our last article Diversified miners production updates and analyst estimates (21 July) we looked at recently released production updates from Rio Tinto, Anglo American and BHP Billiton. We also assessed the discount from current share prices, to the mean of analyst estimates, in terms of their target prices for these companies.
In the two weeks since, we have had interim results releases from Rio Tinto (2 August) and Anglo American (27 July) and await full year results from BHP Billiton (due 22 August). We thought it worthwhile to update current analyst target prices for these shares and the relevant discount/premium to current share prices.