UPDATE: Citigroup Reiterates on Cliffs Natural Resources on Estimate Revisions

In a report published Monday, Citigroup analyst Brian Yu reiterated a Neutral rating on Cliffs Natural Resources (NYSE: CLF), and raised the price target from $24.00 to $27.00.

In the report, Citigroup noted, “Based on our revised commodity price forecasts we have raised our EPS estimates for ‘13/'14 to $2.96 / $2.05 from $2.87 / $1.55 but are reducing our '15 EPS estimate to -$0.13 from $1.35 to reflect our lower iron ore price forecast for ‘15. Based on our 2014 estimates and a 7.0x multiple we apply an 80% weighting on our $32/sh EV/EBITDA derived valuation and a 20% weighting on our DCF derived valuation of $8/sh to arrive at our increased target price of $27/sh. Clearly there is risk to CLF's share price if iron ore falls below $100/tonne as we expect, but this is not expected to occur in 2014, the basis of our valuation framework.”

Cliffs Natural Resources closed on Friday at $27.51.