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Cleveland-Cliffs Inc (CLF)
NYSE:CLF
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Cleveland-Cliffs
(NYSE:CLF)
Rating:48Neutral
Price Target:
$7.00
▼(-7.16%Downside)
Positive Factors
Contract Conclusion
The conclusion of the unprofitable five-year slab contract with Calvert at year-end could potentially improve EBITDA by $500m under the current price environment.
Cost Reduction
Cliffs expects $300m in annual incremental EBITDA/capex savings from operational changes.
Operational Restructuring
Cleveland-Cliffs is attempting to restructure its operations to improve profitability, while focusing on the automotive sector.
Negative Factors
Financial Performance
EBIT collapsed to -$538 million, marking the worst performance ever for Cleveland-Cliffs.
High Leverage
A record increase in debt has pushed Cleveland-Cliffs' leverage close to 40 times, mainly due to ill-advised acquisitions.
Market Share Losses
Cleveland Cliffs is currently facing significant market share losses and a decline in U.S. auto demand.
Cleveland-Cliffs (CLF) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.74B
Dividend YieldN/A
Average Volume (3M)30.24M
Price to Earnings (P/E)―
Beta (1Y)1.47
Revenue Growth-15.00%
EPS Growth-423.14%
CountryUS
Employees30,000
SectorBasic Materials
Sector Strength69
IndustrySteel
Share Statistics
EPS (TTM)-0.92
Shares Outstanding494,656,200
10 Day Avg. Volume48,406,912
30 Day Avg. Volume30,236,255
Financial Highlights & Ratios
PEG Ratio0.06
Price to Book (P/B)0.60
Price to Sales (P/S)0.00
P/FCF Ratio-3.57
Enterprise Value/Market Cap3.02
Enterprise Value/Revenue0.14
Enterprise Value/Gross Profit-18.66
Enterprise Value/Ebitda4.72
Forecast
1Y Price Target
$8.34Price Target Upside10.61% Upside
Rating ConsensusHold
Number of Analyst Covering8
Cleveland-Cliffs Business Overview & Revenue Model
Company DescriptionCleveland-Cliffs Inc. operates as a flat-rolled steel producer in North America. The company offers carbon steel products, such as hot-rolled, cold-rolled, electrogalvanized, hot-dip galvanized, hot-dip galvannealed, aluminized, enameling, and advanced high-strength steel products; stainless steel products; plates; and grain oriented and non-oriented electrical steel products. It also provides tubular components, including carbon steel, stainless steel, and electric resistance welded tubing. In addition, the company offers tinplate products, such as electrolytic tin coated and chrome coated sheet, and tin mill products; tooling and sampling; raw materials; ingots, rolled blooms, and cast blooms; and hot-briquetted iron products. Further, it owns five iron ore mines in Minnesota and Michigan. The company serves automotive, infrastructure and manufacturing, distributors and converters, and steel producers. Cleveland-Cliffs Inc. was formerly known as Cliffs Natural Resources Inc. and changed its name to Cleveland-Cliffs Inc. in August 2017. The company was founded in 1847 and is headquartered in Cleveland, Ohio.
How the Company Makes MoneyCleveland-Cliffs makes money by producing and selling steel products, primarily flat-rolled steel, which is used extensively in the automotive, infrastructure, and manufacturing sectors. The company operates through a vertically integrated business model, from mining iron ore to producing and distributing steel products. Key revenue streams include the sale of steel coils, sheets, and plates. Additionally, Cleveland-Cliffs generates income from its mining operations, supplying iron ore pellets to its own steel plants and external customers. The company's significant partnerships with automotive manufacturers and other industrial clients also play a crucial role in its earnings, ensuring steady demand for its steel products.
Cleveland-Cliffs Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: -11.19%|
Next Earnings Date:Jul 18, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a challenging quarter with significant losses and operational restructuring. However, there are positive indications of future improvements, particularly due to the reshoring of automotive production and operational efficiencies.Q1-2025 Updates
Positive Updates
Automotive Industry Reshoring
Cleveland-Cliffs is benefiting from the reshoring of automotive production to the United States. The company expects an annual EBITDA benefit of $250 million to $500 million starting in the second half of 2025 and fully impacting results by 2026.
Operational Efficiency Improvements
Cleveland-Cliffs is idling several loss-making operations, which will generate savings of over $300 million annually. These changes include the idling of mines in Minnesota and facilities in Dearborn, Steelton, Conshohocken, and Riverdale.
Stelco Integration
The acquisition of Stelco has been well-aligned with Cleveland-Cliffs' commercial strategy, allowing for more business opportunities in the U.S. and Canada.
Negative Updates
Unacceptable Q1 Results
Cleveland-Cliffs reported an adjusted EBITDA loss of $174 million for Q1 2025, largely due to underperformance of non-core assets and low steel prices.
Onerous Slab Supply Contract
The contract with ArcelorMittal for slab supply resulted in significant negative margins due to a price correlation disruption. This contract will expire in December 2025.
Impact of Section 232 Tariffs
The implementation of tariffs has affected Cleveland-Cliffs' operations, especially with respect to imports and the supply agreement with ArcelorMittal.
Project Uncertainties
The future of DOE-supported strategic projects at Middletown and Butler is uncertain due to changes in administration priorities, with significant modifications expected.
Company Guidance
During the Cleveland-Cliffs First Quarter 2025 Earnings Conference Call, guidance focused on several strategic initiatives aimed at improving financial performance. The company acknowledged a challenging Q1 with an adjusted EBITDA loss of $174 million and total shipments of 4.14 million tons. To address underperformance, Cleveland-Cliffs plans to optimize its operational footprint, expecting $300 million in annual savings from idling non-core assets and operational changes. Additionally, anticipated benefits from reshoring automotive production are expected to contribute $250 million to $500 million in annual EBITDA. The company also plans to reduce capital expenditures from $700 million to $625 million in 2025, with further reductions expected in 2026. They emphasized a focus on domestic automotive steel supply, reshoring efforts, and resolving a disadvantageous slab supply contract by 2026, projected to free up $500 million in annualized EBITDA. The strategic initiatives, combined with improving market conditions, aim for a financial rebound by the second half of 2025 and into 2026.Cleveland-Cliffs Financial Statement Overview
Summary
Cleveland-Cliffs is facing significant financial challenges with declining revenues, negative profitability, and negative cash flow trends. The company also shows increasing financial leverage and liquidity issues, requiring strategic adjustments to stabilize operations and improve financial health.Income Statement
Cleveland-Cliffs has experienced a declining revenue trend from 2023 to the TTM of 2025, with a significant drop in profitability as evidenced by a negative gross profit margin and net profit margin. The revenue growth rate is negative, reflecting a challenging environment. The EBIT and EBITDA margins have turned negative in the TTM period, indicating operational challenges.45
Neutral
Balance Sheet
The company has a moderate debt-to-equity ratio, suggesting a relatively balanced financial leverage. However, the equity ratio has been declining, indicating increasing financial risk. Return on equity has turned negative in the TTM period, reflecting recent losses.60
Neutral
Cash Flow
Cleveland-Cliffs' operating cash flow has turned negative in the TTM period, raising concerns about cash generation. Free cash flow has decreased significantly, impacting the free cash flow to net income ratio. These trends indicate potential liquidity challenges.50
Neutral
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 18.61B | 19.18B | 22.00B | 22.99B | 20.44B | 5.35B | Gross Profit |
| -606.00M | 70.00M | 1.39B | 2.52B | 4.53B | 252.00M | EBIT |
| -1.26B | -756.00M | 677.00M | 1.94B | 4.01B | 5.00M | EBITDA |
| -63.00M | 378.00M | 1.86B | 3.11B | 5.04B | 310.00M | Net Income Common Stockholders |
| -1.18B | -754.00M | 399.00M | 1.33B | 2.99B | -82.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 30.00M | 54.00M | 198.00M | 26.00M | 48.00M | 112.00M | Total Assets |
| 17.24B | 20.95B | 17.54B | 18.75B | 18.98B | 16.77B | Total Debt |
| 3.66B | 7.07B | 3.14B | 4.25B | 5.24B | 5.39B | Net Debt |
| 3.63B | 7.01B | 2.94B | 4.22B | 5.19B | 5.28B | Total Liabilities |
| 9.79B | 14.05B | 9.41B | 10.71B | 13.20B | 14.43B | Stockholders Equity |
| 7.20B | 6.66B | 7.89B | 8.04B | 5.77B | 2.03B |
| Cash Flow | Free Cash Flow | ||||
| -1.05B | -590.00M | 1.62B | 1.48B | 2.08B | -786.00M | Operating Cash Flow |
| -388.00M | 105.00M | 2.27B | 2.42B | 2.79B | -261.00M | Investing Cash Flow |
| -3.18B | -3.21B | -591.00M | -936.00M | -1.38B | -2.04B | Financing Cash Flow |
| 3.60B | 2.97B | -1.50B | -1.51B | -1.47B | 2.06B |
Cleveland-Cliffs Technical Analysis
Neutral
7.54
Price Trends
7.61
Negative
8.97
Negative
10.49
Negative
Market Momentum
-0.27
Negative
53.52
Neutral
88.44
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CLF, the sentiment is Neutral. The current price of 7.54 is above the 20-day moving average (MA) of 7.09, below the 50-day MA of 7.61, and below the 200-day MA of 10.49, indicating a neutral trend. The MACD of -0.27 indicates Negative momentum. The RSI at 53.52 is Neutral, neither overbought nor oversold. The STOCH value of 88.44 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CLF.
Cleveland-Cliffs Risk Analysis
Cleveland-Cliffs disclosed 28 risk factors in its most recent earnings report. Cleveland-Cliffs reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 1 New Risks
1.
We face ongoing risks relating to the recent Stelco Acquisition. Q4, 2024
Cleveland-Cliffs Peers Comparison
Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $16.21B | 22.10 | 10.27% | 1.49% | -5.60% | -35.05% | |
78 Outperform | $20.15B | 17.94 | 13.08% | 1.37% | -7.42% | -48.08% | |
70 Outperform | $28.23B | 21.78 | 6.54% | 1.78% | -10.88% | -66.97% | |
67 Neutral | $24.96B | 18.02 | 2.60% | 1.48% | -8.56% | 68.36% | |
58 Neutral | $12.17B | 182.48 | 0.86% | 0.37% | -14.79% | -88.78% | |
51 Neutral | $2.01B | -1.11 | -21.16% | 3.67% | 2.69% | -30.65% | |
48 Neutral | $3.74B | ― | -17.57% | ― | -15.00% | -423.14% |
* Basic Materials Sector Average
Performance Comparison
CLF
Cleveland-Cliffs
7.54
-8.58
-53.23%
MT
ArcelorMittal
30.33
5.23
20.84%
NUE
Nucor
121.86
-37.20
-23.39%
RS
Reliance Steel
308.57
23.71
8.32%
STLD
Steel Dynamics
134.97
9.76
7.79%
X
United States Steel
53.75
15.57
40.78%
Cleveland-Cliffs Corporate Events
Executive/Board ChangesShareholder Meetings
Cleveland-Cliffs Shareholders Approve Directors and Compensation
Positive
May 21, 2025
On May 15, 2025, Cleveland-Cliffs Inc. held its Annual Meeting of Shareholders, where all nominated directors were elected for a term expiring in 2026. The shareholders also approved the executive officers’ compensation with over 90% affirmative votes and ratified Deloitte & Touche LLP as the independent registered public accounting firm for 2025, reflecting strong shareholder support for the company’s governance and financial oversight.
The most recent analyst rating on (CLF) stock is a Hold with a $19.00 price target. To see the full list of analyst forecasts on Cleveland-Cliffs stock, see the CLF Stock Forecast page.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.