Can Cliffs Natural Resources Maintain Its Stellar Run in 2017?


Jan. 31 2017, Updated 6:55 p.m. ET

Cliffs Natural Resources scale heights

Cliffs Natural Resources’ (CLF) stock price ended 2016 with a bang, gaining 404% during the year. The early months of 2016 brought good news in the form of trade cases, which helped curb the illegal influx of cheap steel products into the United States. Then Cliffs announced debt tenders, which helped it with much-needed debt reductions and maturity extensions. Finally, Donald Trump’s presidential win and the promised infrastructure push acted as positive catalysts for the stock price and led to a rally in US steel stocks (SLX) such as U.S. Steel Corporation (X), Nucor (NUE), ArcelorMittal, and AK Steel (AKS). Cliffs is the only iron ore pellet supplier to the US steel sector.

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Series overview

Trump’s presidency has helped boost market sentiment and steelmakers’ prices. However, we should remember that in the medium-to-long term, earnings are a key driver of stock prices.

In this series, we’ll look at earnings estimates for Cliffs. It’s important to note that analyst estimates usually lag behind price movements—upgrades come after stocks have risen. As for downgrades, they come after stock prices fall.

That said, changes in analyst estimates are key drivers of short-term price movements. Investors should keep track of changes in analyst estimates because they provide insights into what the markets expect from a company.


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