Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Cliffs Natural Resources (NYSE:CLF) sank 13% today after a Wall Street analyst downgraded the iron ore miner from equal-weight to underweight.

So what: Along with the downgrade, Morgan Stanley cut its price target on the stock to $14 a share, representing a whopping 35% of downside to yesterday's closing price. Although the stock has already been walloped over the past year, Morgan Stanley believes that the deteriorating U.S. iron ore market and Cliffs' depleting reserves are still not fully baked into the price.

Now what: Expect the short term to remain extremely turbulent. "We believe that the supply demand balance in the isolated Great Lakes pellet market will deteriorate as up to ~13 mt of new supply comes online over the next ~3 years in a ~60 mt market," wrote Morgan Stanley in a note. "As the only non-steelmaking producer in the region, we believe [Cliffs] will be most affected. US Iron Ore segment EBITDA could halve vs. 2012 levels." Of course, with the stock now down a staggering 80% over the past year, long-term bargain hunters might want to take a closer look.

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