Goldman Sachs has downgraded mining and natural resources
company, Cliffs Natural Resources Inc(
) to a "Sell" on Tuesday.
The firm reported that they have downgraded CLF from "Neutral"
to a "Sell," and lowered their price target from $33 to $25. This
price target suggests a 33% decline from the stock's current price
An analyst from the firm noted, "we downgrade Cliffs to Sell
with 29% downside to our new 6-month target price of $25. The
announcement to delay its Bloom Lake expansion and curtail some US
operations underscores that in a relatively weak iron ore market,
high cost producers like Cliffs will be at greater disadvantage.
Additionally, we anticipate lower production volume in Canada will
translate into higher costs. While we expect a price rebound in
2013, we see prices falling thereafter, placing its expansion plans
and dividends at risk. Longer term, new iron ore capacity is being
added in North America, which has historically been a stable region
Cliffs Natural Resources shares were down $1.90, or -5.38%
during premarket trading Tuesday. The stock is down 43.4% YTD.
The Bottom Line
Shares of Cliffs Natural Resources (
) have a 7.08% dividend yield, based on last night's closing stock
price of $35.29. The stock has technical support in the $29-$31
price area. If the shares can firm up, we see overhead resistance
around the $39-$41 price levels.
Cliffs Natural Resources Inc(
) is not recommended at this time, holding a Dividend.com DARS™
Rating of 3.1 out of 5 stars.
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, as well as a detailed explanation of
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