UPDATE: J.P. Morgan Resumes Coverage on Cliffs Natural Resources at Overweight

J.P. Morgan is out with its report today on Cliffs Natural Resources CLF, resuming coverage on CLF at Overweight. In a note to clients, J.P. Morgan writes, "We were restricted on Cliffs Natural Resources due to J.P. Morgan's involvement in the transaction announced on January 11, 2011. Now that the transaction is complete, we are resuming coverage with an Overweight rating (previously Overweight) and a December 2011 price target of $119 (previously a December 2011 price target of $76). We expect Cliffs' sales mix of iron ore tied to seaborne pricing will increase to 60% in 2014E from 40% in 2010, potentially triggering a re-rating in CLF shares when leverage to solid industry fundamentals becomes more readily apparent. In our view, at 4.2x our 2012E EBITDA CLF appears to be factoring in a large decline in iron ore prices while ascribing little value to the Consolidated Thompson deal." At the time of posting, shares of CLF were trading pre-market at $85.35, down 0.77% from Friday's close.