Cliffs price target slashed at Wells Fargo, which foresees dividend cut

|About: Cliffs Natural Resources Inc. (CLF)|By:, SA News Editor

Wells Fargo's Sam Dubinsky cuts his price target for Cliffs Natural Resources (CLF -1%) to $7-$10 from $12-$14, saying the stock has nowhere to go but down and a dividend cut is the "next shoe to drop."

The firm has been overwhelmingly bearish on CLF in the past two months but sees continued downside risk because of potential further deterioration in iron ore prices, a probable dividend cut, and the Street resetting estimates meaningfully lower.

Wells estimates CLF is burning ~$80M in cash including capex and ~$220M including dividend payments, and views the dividend as unsustainable unless pricing recovers to $100-$110/metric ton or assets are sold.