Jefferies downgrades Cleveland-Cliffs on U.S. Steel deal negatives

Jefferies last night downgraded Cleveland-Cliffs (CLF) to Hold from Buy with a price target of $6, down from $10. An acquisition of U.S. Steel (X) by Nippon, with $14B of associated investment directed toward the company’s existing operations and the construction of a new steel mill, would be negative for the major U.S. producers over most time horizons, the analyst tells investors in a research note. The firm says that while protectionist U.S. policies will help, the outlook for steel in the U.S. “has become less positive at the margin.” It downgraded Cliffs, saying the company is most leveraged to changes in steel pricing.