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Morgan Stanley Maintains on Cliffs Natural Resources

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In a report published Thursday, Morgan Stanley analyst Evan Kurtz maintained Underweight on Cliffs Natural Resources (NYSE: CLF), lowering its price target to $14.00 from $12.00.

According to the report, CLF should announce a decision on the future of Bloom Lake with 4Q13 results.

“We examine 5 scenarios: 1) Cliffs moves forward with Phase II, with a new partner helping to fund capex; 2) Phase II proceeds without a new partner; 3) all Bloom Lake operations are halted; 4) Cliffs continues to operate only Phase I; 5) Cliffs seeks bankruptcy protection for the Canadian subsidiary, which we view as highly unlikely. Inside, we review each scenario and provide NPV sensitivities, where applicable,” the report noted.

Some highlights from the report included:

-Expectations may be too bullish -Investors may be overlooking the impact of rising freight rates on Bloom Lake price realizations

CLF closed Wednesday at $21.19.

Latest Ratings for CLF

DateFirmActionFromTo
Jul 2014BernsteinUpgradesUnderperformMarket Perform
Jul 2014Clarkson CapitalDowngradesMarket PerformUnderperform
Jul 2014MacquarieUpgradesUnderperformNeutral

View More Analyst Ratings for CLF
View the Latest Analyst Ratings

Posted-In: Evan Kurtz Morgan StanleyAnalyst Color Price Target Analyst Ratings

 

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