How Analysts View Cleveland-Cliffs ahead of 2018

The majority of ratings for Cleveland-Cliffs (CLF) are “hold.” According to the consensus compiled by Thomson Reuters, a total of nine analysts cover the stock currently. While 56% of analysts rate it a “hold,” 22% rate it a “buy” and 22% rate it a “sell.”

CLF’s target price implies an upside of 2.7%, compared to its current market price of $6.6.

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).

On November 24, KeyCorp reiterated its “hold” rating for CLF’ stock. The firm’s analyst P. Gibbs, however, boosted Cleveland-Cliffs’s earnings per share estimates for fiscal 2018 from $0.71 to $0.72.

On November 17, B. Riley set a target price of $10.0 for Cleveland-Cliffs’s stock. The firm has a “buy” rating on the stock. B. Riley FBR analyst Lucas Pipes noted that its firm held a non-deal roadshow for Cleveland-Cliffs. The key points were:

• the HBI (hot-briquetted iron) project in Toledo
• the outlook for the Australian iron ore segment
• CLF’s expectations of steel and iron ore price outlook

On the HBI project, management said it should generate an IRR (internal rate of return) of 20%.

FBR & Co. upgraded Cleveland-Cliffs from “market perform” to “outperform” on April 28, citing favorable risk-reward factors.

On October 23, J.P. Morgan (JPM) downgraded Cleveland-Cliffs stock from “overweight” to “neutral.” Its target price was also cut from $9.50 to $7.00.

The downgrade from JPM reflected lower estimates for US iron ore’s realized prices in 4Q17, which Cleveland-Cliffs anticipated.