uploads///Analyst Reco

How Analysts View CLF as Its 1Q17 Earnings Release Approaches

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Analysts’ recommendations

Cliffs Natural Resources (CLF) has “buy” recommendations from 13% of analysts covering the stock and “sell” recommendations from another 25% of these analysts. About 63% of analysts recommend a “hold.” The target price implies an upside of 26% at the current market price of $6.86.

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).

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Analysts are upbeat about 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.

Axiom Capital’s view

While many analysts have turned positive on steel stocks (SLX) amid expectations of rising protectionism under President Donald Trump’s administration, not all of them share in this optimism.

As reported in Barron’s blog, Axiom Capital’s Gordon Johnson noted, “As we have stated previously, we feel President Trump’s administration will likely resort to countervailing duties/tariffs to penalize the countries it deems are cheating (not 201/301 actions). However, given roughly 88 countries import steel into the US, we question how effective this approach will prove as many countries will simply re-route steel to the countries who can ship into the US, ultimately allowing the steel to find its way to our shores.”

Johnson is also concerned about the “significant risk” of further price declines in the iron ore prices over the next three to four months. The firm has a “sell” rating on Cliffs Natural Resources with a target price of $2.

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