Cliffs had a solid Q4/14 despite weak market prices for iron ore and met coal due to cost-cutting measures and strong results in U.S. Iron Ore. However, if current commodity prices persist, Cliffs’ plans to repurchase debt and possibly shares could be hampered by weak free cash flow beyond 2015. Given the risks to the iron ore market outlook over the next 12 – 24 months, we maintain our Sector Perform rating and $8 price target.
Shares of Cliffs Natural Resources have gained 3.1% to $6.67 at 10:50 a.m. today, perhaps given a boost by Rio Tinto’s solid earnings and buyback plans, which helped the mining giant gain 2.3% to $46.87.
Source: .barrons.com/