UPDATE: Citigroup Cuts PT to $32 on Cliffs Natural Resources on Common and Preferred Offerings
Citigroup maintained Cliffs Natural Resources (NYSE: CLF) with a Neutral rating and lowered the price target from $36.00 to $32.00.
Citigroup noted, "After modeling the announced public offering of common and convertible preferred shares, we are lowering our 2013 estimate to $0.79 from $1.14, 2014 estimate to $2.15 from $2.40, and 2015 estimate to $2.50 from $2.78. … We are lowering our target to $32 from $36 on the back of these changes, maintaining Neutral rating as shares no longer look attractive on $120/tonne iron ore following higher cost guidance, dividend cut and surprise equity issuance. The key risk to our Neutral rating is iron ore pricing with every $5/tonne annual change in the benchmark translating to $140 mln of EBITDA and $0.56/sh EPS. On spot of $155/tonne, CLF could earn close to $2.0 bln EBITDA and $5/sh in 2013."
Cliffs Natural Resources closed at $28.85 on Friday.
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