Goldman Sachs Lowers Estimates on Cliffs Natural Resources (CLF)

Goldman Sachs Lowers Estimates on Cliffs Natural Resources (CLF)


On Wednesday Goldman Sachs reported that it has lowered its price target on natural resources company, Cliffs Natural Resources Inc (CLF).

The firm has reiterated a “Neutral” rating on CLF, and has cut the company’s price target from $21 to $16. This price target suggests that the stock will remain flat at its current price of $16.17.

Analysts have also lowered estimates for the third and fourth quarters. Estimates have been reduced from $1.05 to 69 cents and 90 cents to 72 cents respectively.

An analyst from the firm noted, “we remain concerned about Cliff’s long-term earnings potential based on our expectations for $80-$90 per tonne iron ore starting in 2015, particularly for its Canadian and Australian operations. Although it plans to lower costs at Bloom Lake, we believe getting to its targeted $65 per tonne cost from around $90 currently will be a tough path, even if it decides to mothball its Phase II expansion.”

“We believe that CLF will need to make some tough decisions to sort out its portfolio of assets, and will most likely return to being a US iron ore company where is has the lowest cost and a stable captive market.”

Cliffs Natural Resources shares were down 49 cents, or 2.95%, during Wednesday morning trading. The stock is down 58% YTD.

The Bottom Line

Shares of Cliffs Natural Resources Inc (CLF) have a 3.71% yield based on Wednesday morning’s price of $16.17.

Cliffs Natural Resources Inc (CLF) is not recommended at this time, holding a DARS™ Rating of 2.9 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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