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Iron Ore Surge: How Are Analysts Rating the Miners?

PART:
1 2 3 4 5 6 7 8 9 10 11
Part 10
Iron Ore Surge: How Are Analysts Rating the Miners? PART 10 OF 11

How Analyst Sentiments Are Panning Out for Cliffs Natural Resources

Analysts’ recommendations

Cliffs Natural Resources (CLF) has “buy” recommendations from 22% of analysts covering the stock and “sell” recommendations from another 22% of these analysts. About 56% of analysts are recommending a “hold.” Its target price implies a downside of 6% at the current market price of $9.70.

The chart below shows analysts’ recommendations for Cliffs Natural Resources and US (VTI) (QQQ) steel peers U.S. Steel (X), AK Steel (AKS), and Nucor Steel (NUE). 

How Analyst Sentiments Are Panning Out for Cliffs Natural Resources

How Analyst Sentiments Are Panning Out for Cliffs Natural Resources

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Analysts are upbeat on Cliffs Natural Resources

Credit Suisse (CS) has raised its outlook for iron ore. It raised Cliffs Natural Resources’s (CLF) target price from $2 to $8 on March 3, 2017. However, it’s still not very positive on Cliffs Natural Resources stock with its “underperform” rating.

FBR raised Cliffs Natural Resources’s target price from $10 to $11 after the company’s solid 4Q16 earnings beat and a stronger outlook for 2017. It also views the company’s equity offer positively. FBR analyst Lucas Pipes commented about the offer, “We view the company’s decision to proactively address 2020 maturities positively, especially on the recent strength in iron ore prices.”

Macquarie is upbeat about Cliffs Natural Resources’s 2016 results as well as its equity offering announcement. It believes the offering is an important step toward removing its debt burden. It could also put Cliffs Natural Resources on a path of stronger growth. Macquarie said, “If management’s guidance proves to be accurate, we believe the shares may be worth as much as $20.”

J.P. Morgan raised its target price for CLF stock from $10 to $12 but retained its “overweight” rating on the stock.

Axiom’s negative view

Gordon Johnson, an Axiom analyst, has a different point of view. Axiom raised its iron ore price outlook for 2017 from $45 per ton to $60 per ton, but it remains “negatively biased” toward its outlook. The firm also maintained its “sell” rating on Cliffs Natural Resources with a target price of $2. It raised its target prices for Rio Tinto (RIO) and Fortescue Metals Group (FSUGY).

 

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