UPDATE: Cowen Maintains Sell Rating and $20 PT on Cliffs Natural Resources as Company Announces to Idle Production on Oversupplied Iron Ore

Cowen analyst Anthony B. Rizzuto published a report on Cliffs Natural Resources CLF that maintains its Sell rating and $20 price target. Cowen reported that, “Cliffs yesterday announced its intention to idle pelletizing operations at Wabush and transition to a more cost effective concentrate product beginning in the second half of 2013. The move was indeed anticipated by the market considering the recent economics of the facility, though it did happen earlier than expected (the facility was running in order to fulfill customer contracts). While we believe the move is a prudent one, the cost guidance seems a bit aggressive, in our opinion. The 4Q12 cash costs were $166/mt, and we would expect similar (perhaps slightly better) performance in 1H13 until the facility is idled. New full-year guidance of $115-$120/mt implies a 2H13 cost that appears unrealistic considering our estimates for 1H13 costs.” Shares of Cliffs Natural Resources closed at $23.83 on Monday.