What Analysts Recommend for CLF ahead of 4Q17 Results


Jan. 17 2018, Updated 10:31 a.m. ET

Analyst recommendations for CLF

Out of the nine analysts covering Cleveland-Cliffs (CLF) stock, 55.6% rate it as a “hold,” while the rest of the ratings are divided equally between “buy” and “sell” ratings.

The stock’s current target price is $6.94, which implies a downside of 20% based on its current market price of $8.68. The chart below shows the analysts’ recommendations for Cleveland-Cliffs and its US (SPX) (SPY) steel peers.

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KeyBanc is optimistic on US steel sector

KeyBanc Capital Markets’ analyst Philip Gibbs believes that currently, the US steel sector (SLX) looks more attractive than in the past. The analyst upgraded Timkensteel (TMST) from “underweight” to “sector weight.” He maintained an “overweight” rating on Reliance Steel & Aluminum while boosting the target price from $84 to $95. The firm also reaffirmed its “overweight” rating on Steel Dynamics (STLD), while at the same time increasing its target price from $44 to $49.

Gibbs mentioned that the 4Q17 shipments were stronger than distributors expected due to stronger energy and industrial demand and some implied restocking. Due to this strong momentum, he lifted the US HRC (hot-rolled coil) price estimates from $615 per ton to $655 per ton.

He added that the stock prices of AK Steel (AKS) and U.S. Steel (X) are factoring in an elevated pricing environment, while Cliffs “seems under-appreciated despite recent buoyancy in North Atlantic Basin pellet premium.” He added that its stock price could see a tactical upside during 1Q18.

Other opinions

Cliffs’ most recent rating change came from J.P. Morgan (JPM), which downgraded the stock from “neutral” to “underweight” on October 23, 2017. JPM analyst Michael Gambardella cited lower US realized iron ore prices as the main reason for the downgrade.


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