Deutsche Bank Downgrades Cliffs Natural Resources (CLF) to Hold Post Q4 on Dilution

February 13, 2013 6:57 AM EST Send to a Friend
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Price: $18.65 -0.27%

Rating Summary:
    5 Buy, 15 Hold, 7 Sell

Rating Trend: = Flat

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Deutsche Bank downgraded Cliffs Natural Resources (NYSE: CLF) from Buy to Hold with a price target of $38.00 (from $48.00) following Q4 EPS of $0.62 ahead of both DB's of $0.54 and FactSet consensus of $0.51, but EBITDA of $254 million was lower than DB's of $308m on lower iron ore volumes and prices / higher costs.

The firm estimates 19-21% dilution from unexpected share issuance of 27-30m shares.

"Though BS position to improve, we question timing of issuance as 2013 cash flow generation likely to increase and after dividend cut by ~75% to $0.60 (from $2.50). Additionally, BL costs continue to disappoint, and while 2013 SG&A should be down by $60m, capex upped by $75m (to $825m)."

For an analyst ratings summary and ratings history on Cliffs Natural Resources click here. For more ratings news on Cliffs Natural Resources click here.

Shares of Cliffs Natural Resources closed at $36.61 yesterday.




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