Citi Raising Estimates On Cliffs Natural Resources (CLF)

Citi Investment Research is raising its earnings estimates on shares of Cliffs Natural Resources Inc CLF, as the investment bank also raises its outlook on iron ore. It has a $87 price target and a Buy/High Risk rating on Cliffs. In a note to clients, Citi writes, "Key changes to the seaborne iron ore outlook include a ‘11 deficit of 26 mln tonnes vs prior 5 mln tonne surplus, and a ‘12 deficit of 33 mln tonnes vs prior 4 mln tonne surplus. In ‘13 and beyond, we expect surpluses. Based on CIRA’s higher iron ore projections and the inclusion of the acquired INR energy assets into our model, we are raising our 2010 estimate to $8.60 from $8.54, 2011 to $10.15 from $8.55 and 2012 to $9.85 from $8.07." Cit goes on to say, "CLF continues to trade at a heavily discounted multiple of 5.9x on our ’11 estimate due to iron ore volatility, contracts in arbitration, and recent acquisitions. We see value and opportunity in the potential unwinding of compressed multiples." Shares of Cliffs Natural Resources gained $2.80 on Friday, to close to $60.22.