Analyst Lawson Winder from Bank of America Securities reiterated a Hold rating on Cleveland-Cliffs and decreased the price target to $14.00 from $14.50.
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Lawson Winder’s rating is based on several key considerations. Cleveland-Cliffs recently announced a significant equity offering to improve its financial position, which is expected to raise substantial proceeds. While this move helps to reduce financial leverage, the company’s leverage remains considerably higher compared to its industry peers. This high leverage is a critical factor in maintaining a cautious outlook.
Additionally, the potential partnership with POSCO, a major global steel producer, offers promising opportunities that could benefit shareholders. However, the details of this partnership are not yet fully disclosed, adding an element of uncertainty. Furthermore, the company’s projected earnings and EBITDA for the upcoming quarters are expected to be below market consensus, which tempers the overall positive impact of the equity raise and potential partnership. As a result, the Hold rating reflects a balanced view of these positive and negative factors.
According to TipRanks, Winder is a 5-star analyst with an average return of 15.7% and a 57.54% success rate. Winder covers the Basic Materials sector, focusing on stocks such as Freeport-McMoRan, Barrick Mining, and Centerra Gold.
In another report released on October 26, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a $13.50 price target.