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How Analysts View Cleveland-Cliffs ahead of 4Q17

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Sep. 15 2017, Updated 9:13 a.m. ET

Analysts’ recommendations for CLF

The majority of analysts covering Cleveland-Cliffs (CLF) have given it a “hold” rating. Plus, 44% of the analysts recommend a “hold,” 33% recommend a “buy” for the stock, and 23% recommend a “sell.” 

These ratings are in accordance with the consensus compiled by Thomson Reuters. Its target price implies a downside of 8.6%, compared to its current market price of $7.66.

The chart above shows analysts’ recommendations for Cleveland-Cliffs and its US (DIA) (DOW) steel peers AK Steel (AKS), Nucor Steel (NUE), and U.S. Steel (X).

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FBR reaffirms rating

FBR & Co. reaffirmed its “buy” rating on Cleveland-Cliffs stock on September 6, 2017. FBR & Co. analyzed the project economics for Cleveland-Cliffs’ HBI (hot-briqueted iron) plant. The firm stated that even after changing the input prices from Cleveland-Cliffs’ production costs to market prices, the project economics remain attractive. 

The firm also noted that the scenario analysis bodes well for the stock. FBR has a target price of $10 on the stock. FBR & Co. upgraded Cleveland-Cliffs from “market-perform” to “outperform” on April 28, 2017, citing favorable risk-reward factors.

Cowen reaffirms rating

Cowen & Co. reiterated its “hold” rating for Cleveland-Cliffs on August 3, 2017. In June 2017, Cowen had also hosted Cleveland-Cliffs’ management and investors for dinner to discuss CLF’s HBI plant and Section 232. Its analyst had positive takeaways from the meeting regarding both agendas.

Axiom Capital analyst Gordon Johnson is bearish on Cleveland-Cliffs. He favors shorting stocks like Cleveland-Cliffs (CLF), Fortescue Metals (FSUGY), Rio Tinto (RIO), and U.S. Steel (X).

In the next part of this series, we’ll take a closer look at the earnings estimates for Cleveland-Cliffs.

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