Cleveland-Cliffs
CLF
$10.74
-3.85%
Cleveland-Cliffs Inc. is a leading North American flat-rolled steel producer and the largest manufacturer of iron ore pellets in the region, operating a vertically integrated business that spans from raw materials like iron ore and ferrous scrap to primary steelmaking and downstream finishing, stamping, tooling, and tubing. The company is a dominant supplier to the automotive industry and differentiates itself through its comprehensive product offering and vertical integration, which provides cost advantages and supply chain control. Currently, the stock is in the spotlight due to a robust domestic steel market, with recent news highlighting strong Q2 results and doubled EBITDA guidance, while also facing scrutiny over its profitability struggles and high debt levels, creating a narrative of cyclical recovery versus structural challenges.…
CLF
Cleveland-Cliffs
$10.74
Related headlines
Investment Opinion: Should I buy CLF Today?
Based on the analysis, Cleveland-Cliffs is rated as a Hold. The stock offers a potential recovery story with a forward PE of 23.29x and analyst EPS estimates of $0.89, but the current negative profitability and high debt make it a risky investment. The average analyst target of $11.80 is essentially in line with the current price, providing no upside, which aligns with the Hold consensus. The thesis is that the company will benefit from a strong steel market, but the lack of consistent earnings and high leverage warrant caution.
Sign up to view all
CLF 12-Month Price Forecast
The AI assessment is neutral with medium confidence. The stock is undervalued on a PS basis, but the persistent negative margins and high debt create significant risk. The recent momentum and strong Q2 results provide some optimism, but the lack of consistent profitability is a major concern. The stance would upgrade to bullish if the company reports positive gross margins and demonstrates a clear path to profitability, or if the stock price drops to a more attractive level below $10. Conversely, it would downgrade to bearish if steel prices weaken or if the company announces a dilutive capital raise.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Cleveland-Cliffs's 12-month outlook, with a consensus price target around $11.80 and implied upside of +9.9% versus the current price.
Average Target
$11.80
0 analysts
Implied Upside
+9.9%
vs. current price
Analyst Count
—
covering this stock
Price Range
$10 - $15
Analyst target range
Cleveland-Cliffs is covered by 10 analysts, with a consensus recommendation of 'Hold' and a mean recommendation score of 2.92 (where 1 is Strong Buy and 5 is Sell). The average target price is $11.80, which is slightly below the current price of $11.90, implying a marginal downside of -0.84%. The distribution of ratings is not provided, but the 'Hold' consensus and the recent downgrade by Morgan Stanley from Overweight to Equal Weight suggest a cautious stance, with analysts seeing limited upside at current levels.
Bulls vs Bears: CLF Investment Factors
Cleveland-Cliffs presents a classic cyclical recovery story with significant upside potential but also substantial risks. The bull case is supported by a strong Q2, doubled EBITDA guidance, and a deep valuation discount, while the bear case is driven by persistent negative margins, high debt, and a cautious analyst outlook. Currently, the bearish evidence is slightly stronger due to the company's inability to generate consistent profits, but the recent momentum and improving steel market conditions tilt the balance toward a more neutral stance. The most critical tension is whether the company can translate robust steel demand into sustainable profitability, as its negative gross margins suggest structural cost issues that may not be fully resolved by cyclical tailwinds.
Bullish
- Vertical Integration Provides Cost Advantage: Cleveland-Cliffs is vertically integrated from iron ore and scrap to finished steel, providing cost control and supply chain security. This structure is particularly advantageous in a tariff-protected market, as noted in recent news, allowing the company to capture more value across the value chain.
- Strong Q2 Results and Doubled EBITDA Guidance: Recent news highlights robust Q2 results and doubled EBITDA guidance, signaling a thriving domestic steel market. This suggests a potential earnings recovery, with forward PE of 23.29x implying a return to profitability, and analysts estimate EPS of $0.89 for the next fiscal year.
- Significant Discount to Peers on PS Ratio: The stock trades at a PS ratio of 0.35x, well below the industry average of 0.77x (EV/Sales). This deep discount may reflect current losses, but it also offers substantial upside if the company returns to profitability, as the market may re-rate the stock closer to peer multiples.
- Recovery from 52-Week Low with Momentum: The stock has rebounded 54% from its 52-week low of $7.73 to $11.90, and is up 20.8% in the past month, outperforming the S&P 500's 2.85% gain. This momentum, coupled with a 1-year price change of +12.69%, indicates improving investor sentiment and a potential cyclical upturn.
Bearish
- Persistent Negative Gross Margins: The company has reported negative gross margins for five consecutive quarters, with Q1 2026 at -1.67%. This indicates that the cost of revenue exceeds revenue, a severe profitability issue that has led to a net margin of -7.94% and negative EPS of -$0.23 over the trailing twelve months.
- High Debt and Interest Burden: With a debt-to-equity ratio of 1.34 and interest expenses of $148 million in Q1 2026, the company's high leverage amplifies financial risk. The negative free cash flow of -$997 million TTM further strains the balance sheet, limiting financial flexibility.
- Analyst Consensus is Hold with Limited Upside: The average analyst target price is $11.80, slightly below the current price of $11.90, implying a marginal downside of -0.84%. The consensus recommendation is 'Hold' with a mean score of 2.92, and Morgan Stanley recently downgraded the stock, reflecting cautious sentiment.
- High Volatility and Cyclicality: With a beta of 2.115, the stock is highly sensitive to market swings, and its 52-week range of $7.73 to $16.70 shows extreme price volatility. The steel industry is cyclical, and the company's earnings are highly dependent on steel prices, which can be unpredictable.
CLF Technical Analysis
Cleveland-Cliffs has exhibited a volatile but ultimately upward trend over the past year, with a 1-year price change of +12.69%, though this masks significant swings. The current price of $11.90 sits at 71.3% of its 52-week range (between $7.73 low and $16.70 high), indicating a recovery from the lows but still well below the highs. This positioning suggests the stock is in a recovery phase, having rebounded from the March 2026 trough, but it has not yet reclaimed the highs seen in late May, reflecting lingering uncertainty about the sustainability of the rally.
Beta
2.12
2.12x market volatility
Max Drawdown
-51.7%
Largest decline past year
52-Week Range
$8-$17
Price range past year
Annual Return
+5.1%
Cumulative gain past year
| Period | CLF Return | S&P 500 |
|---|---|---|
| 1m | +16.1% | +1.9% |
| 3m | -4.4% | +2.3% |
| 6m | +0.8% | +10.6% |
| 1y | +5.1% | +19.5% |
| ytd | -21.0% | +11.8% |
Bobby - Your AI Investment Partner
Get real-time data, AI-driven personalized investment analysis to make smarter investment decisions
CLF Fundamental Analysis
Cleveland-Cliffs' revenue has shown modest growth, with the most recent quarter (Q1 2026) reporting $4.922 billion, a 6.33% YoY increase from $4.629 billion in Q1 2025. However, this growth is inconsistent, as revenue declined sequentially from Q4 2025's $4.313 billion, and the company has experienced negative gross margins for five consecutive quarters, with Q1 2026 gross margin at -1.67%. The revenue growth is driven by the Steelmaking segment, which contributed $4.757 billion, while other businesses added $165 million, but the overall trajectory remains choppy, reflecting the cyclical nature of the steel industry.
Quarterly Revenue
$4.9B
2026-03
Revenue YoY Growth
+6.3%
YoY Comparison
Gross Margin
-1.7%
Latest Quarter
Free Cash Flow
$-997000000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
Open an Account, get $2 TSLA now!
Valuation Analysis: Is CLF Overvalued?
Given that Cleveland-Cliffs has negative trailing twelve-month net income (EPS of -$0.23), the price-to-sales (PS) ratio is the most appropriate valuation metric, as PE ratios are not meaningful for loss-making companies. The current PS ratio is 0.35x, which is significantly lower than the industry average of approximately 0.77x (based on EV/Sales of 0.77), indicating that the stock trades at a substantial discount to its peers. This discount is likely justified by the company's poor profitability, negative margins, and high debt levels, but it also suggests that the market is pricing in a potential recovery, as the forward PE of 23.29x implies expectations of a return to profitability.
PE
-4.4x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 2x~12x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
-148.0x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks are significant for Cleveland-Cliffs. The company has reported negative gross margins for five consecutive quarters, with Q1 2026 at -1.67%, indicating that production costs exceed revenue. This has led to a net loss of $237 million in Q1 2026 and a negative EPS of -$0.42, with a trailing twelve-month EPS of -$0.23. The high debt-to-equity ratio of 1.34 and interest expenses of $148 million per quarter add a substantial fixed cost burden, while negative free cash flow of -$997 million TTM limits the company's ability to invest or reduce debt. These factors create a fragile financial position that is highly sensitive to steel price fluctuations.