Goldman Sachs downgraded Cliffs Natural Resources (NYSE: CLF) from Neutral to Sell with a price target of $25.00 (from $33.00).
The firm comments, "We downgrade Cliffs to Sell with 29% downside to our new 6-month target price of $25. The announcement to delay its Bloom Lake expansion and curtail some US operations underscores that in a relatively weak iron ore market, high cost producers like Cliffs will be at greater disadvantage. Additionally, we anticipate lower production volume in Canada will translate into higher costs. While we expect a price rebound in 2013, we see prices falling thereafter, placing its expansion plans and dividends at risk. Longer term, new iron ore capacity is being added in North America, which has historically been a stable region for Cliffs."
Shares of Cliffs Natural Resources closed at $35.29 yesterday, with a 52 week range of $32.25-$78.85.