FBR Cuts PT on Cliffs Natural Resources (CLF) to $1 Following Sale of Remaining Met Coal Mines

FBR & Co. cuts its price target on Market Perform-rated Cliffs Natural Resources (NYSE: CLF) from $3 down to $1 after Cliffs announced that it closed the sale of its remaining coal business, Pinnacle Mine in West Virginia and Oak Grove Mine in Alabama, to Seneca Coal Resources, LLC.

Analyst Lucas N. Pipes commented: We maintain our Market Perform rating on Cliffs Natural Resources. Seneca Coal Resources plans to produce 4.4 million tons of met coal in 2016, implying no significant reduction in the two mines’ current production rates (3.45 million tons over 1Q15–3Q15). While Cliffs had earlier stated that it would no longer build out longwall panels, we believe that the timing of the sale will allow Seneca to continue production there uninterrupted. We do not currently anticipate Seneca to reduce production in 2017 or later.

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