UPDATE: Morgan Stanley Downgrades Cliffs Natural Resources to Underweight, Lowers PT on Worsening Operational Outlook

In a report published Wednesday, Morgan Stanley analyst Evan L. Kurtz downgraded the rating on Cliffs Natural Resources

from Equal-Weight to Underweight, and lowered the price target from $36.00 to $14.00. In the report, Kurtz noted, “Despite the recent selloff in CLF shares, we are downgrading the stock to Underweight and cutting our price target to $14. We believe Cliffs' key US iron ore business (~60% of 2012 EBITDA) will be halved in coming years as new Great Lakes supply cuts into volumes and pricing. CLF stock has dropped ~44% YTD on deteriorating operational outlook (especially for Bloom Lake) and a surprise dividend cut and equity/convertible preferred raise.” Cliffs Natural Resources closed on Tuesday at $21.43.