Nomura Securities analyst Curt Woodworth cut his price target on Cliffs Natural Resources (NYSE: CLF) to $23.00 (from $26.00) but maintained a Buy rating following Q1 results saying the BL strategic outcome key for stock.

Woodworth commented, "We are reducing our 2014 EBITDA view moderately, primarily to account for higher-than-expected idling costs at Wabush, which are now expected to total $100mm in 2014. Our 2015 EBITDA view is $651mm, owing primarily to weaker iron ore prices y/y, which we assume $100/t, below the forward curve of ~$106/t and current spot ~$111/t. On the conference call Cliffs announced it had engaged bankers to look at various strategic options with respect to Bloom Lake. In our view, it will be very difficult to find a strategic partner at Bloom Lake given the significant cost headwinds, which appear to be more structural than expected and will depend heavily on a Phase II expansion to move lower. We estimate under a Phase I only scenario BL would generate negative FCF of -$139mm per year ($100/t iron ore and $85/t costs).

The firm raised FY14E EPS from $0.34 to $0.5; FY15E EPS from ($0.45) to ($0.35).

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Shares of Cliffs Natural Resources closed at $18.00 yesterday.