Tuesday, August 31, 2010

Citigroup (NYSE:C) Maintains "Buy" on Cliffs Natural Resources (NYSE:CLF)

Citigroup (NYSE:C) reiterated a "Buy" on Cliffs Natural Resources (NYSE:CLF), while raising the earnings estimates of the company for 2010 and 2011.

Citigroup analyst Brian Yu said, "CLF continues to trade at a heavily discounted multiple of 5.9x on our 2011 estimate due to iron ore volatility, contracts in arbitration, and recent acquisitions. We see value and opportunity in the potential unwinding of compressed multiples."

Earning were raised because iron ore prices are expected to rise over the next couple of years.

Earnings per share for 2010 are $8.60 a share, while for 2011 they are estimated at $10.15 a share by Citigroup.

The financial institution also maintained its price target of $87 on Cliffs.

Cliffs was at $59.03 a share, dropping $1.19, or 1.98 percent.

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