Cleveland-Cliffs
CLF
$11.27
+4.93%
Cleveland-Cliffs Inc. is a leading North American flat-rolled steel producer and the largest manufacturer of iron ore pellets in the region, operating an integrated business model that spans from mining and direct reduced iron to steelmaking and downstream finishing. The company is a key supplier to the automotive industry and differentiates itself through vertical integration and a comprehensive product portfolio. Currently, the stock is in the spotlight due to a $1 billion investment in its flagship plant, potential tariff relief, and robust steel demand and pricing that have driven a recent surge in shares, though concerns about high debt and operational volatility persist.…
CLF
Cleveland-Cliffs
$11.27
Related headlines
Investment Opinion: Should I buy CLF Today?
Based on the analysis, I rate Cleveland-Cliffs as a Hold. The consensus recommendation is 'hold' with an average target of $11.80, implying modest upside. The thesis is that the stock is cheap but faces significant operational and financial hurdles that could limit near-term gains.
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CLF 12-Month Price Forecast
The AI assessment is neutral, reflecting a balanced risk-reward profile. The stock is cheap on a PS basis, but the lack of profitability and negative cash flow are major concerns. The forward PE of 19.9x implies market expectations of a turnaround, which is not yet evident. If the company delivers positive earnings in the next two quarters, the stance would upgrade to bullish. Conversely, if losses widen or debt increases, it would downgrade to bearish.
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 +4.7% versus the current price.
Average Target
$11.80
0 analysts
Implied Upside
+4.7%
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 rating of 2.92 (where 1 is strong buy and 5 is sell). The average target price is $11.80, implying a modest 4.7% upside from the current price of $11.27, with a low target of $10.00 and a high target of $15.00. The target range is relatively wide, reflecting uncertainty about the steel cycle and the company's execution. Recent ratings actions show a mixed sentiment, with Morgan Stanley downgrading from Overweight to Equal Weight in June 2026, while GLJ Research upgraded from Sell to Hold, indicating a cautious but not bearish outlook. The wide spread between low and high targets suggests that analysts are divided on the company's prospects, with the high target assuming a strong recovery in steel demand and successful cost reductions, while the low target prices in continued margin pressure and high leverage.
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Bulls vs Bears: CLF Investment Factors
Cleveland-Cliffs presents a classic high-risk, high-reward turnaround scenario. The bull case rests on a deeply discounted valuation, improving revenue trends, and strategic investments that could drive a recovery. However, the bear case is equally compelling with persistent losses, high debt, and negative cash flow. Currently, the bearish evidence is slightly stronger due to the lack of proven profitability and financial strain, but the potential for a steel cycle upswing and tariff protections could tilt the balance. The most critical tension is whether the company can convert its operational improvements into sustained positive earnings, which would justify the current valuation and unlock upside.
Bullish
- Revenue growth accelerating: Q1 2026 revenue grew 6.3% YoY to $4.922B, reversing the sequential decline trend from Q4 2025's $4.313B. This indicates improving demand and pricing power in the steel market.
- Deep valuation discount: PS ratio of 0.35x is significantly below the industry average of 1.5x and near the low end of its 5-year range (0.77x-2.82x). This suggests the market is pricing in substantial pessimism, providing a margin of safety.
- Analyst upside potential: Average analyst target of $11.80 implies 4.7% upside, but the high target of $15.00 suggests 33% upside if the steel cycle turns favorable. Recent upgrades and strong Q2 results support a positive trajectory.
- Strategic investments and tariffs: A $1B investment in its flagship plant and potential tariff relief could enhance competitiveness and margins. The company's vertical integration provides a cost advantage in a protected market.
Bearish
- Persistent unprofitability: Gross margin is -1.7% and net margin is -4.8% in Q1 2026, with negative ROE of -24.2%. The company has not achieved sustainable profitability, raising doubts about its business model.
- High leverage and debt burden: Debt-to-equity ratio of 1.34 and interest expense of $148M in Q1 2026 consume a significant portion of revenue. This limits financial flexibility and increases bankruptcy risk in downturns.
- Negative free cash flow: TTM free cash flow is -$997M, indicating heavy capital expenditure requirements and inability to self-fund operations. This reliance on external financing is a red flag for investors.
- Underperformance vs market: 1-year price change of +11.9% lags the S&P 500's +20.5%, and relative strength is negative across 3M, 6M, and YTD periods. This suggests persistent investor skepticism.
CLF Technical Analysis
Cleveland-Cliffs has experienced a volatile but ultimately upward trend over the past year, with a 1-year price change of +11.9%, though it has underperformed the S&P 500's +20.5% gain. The current price of $11.27 sits at 45.6% of its 52-week range (between $7.73 and $16.70), indicating a mid-range position that suggests neither extreme momentum nor deep value. This positioning reflects a stock that has recovered from its lows but remains well below its highs, implying a market that is cautiously optimistic but not fully convinced of a sustained turnaround.
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
+11.9%
Cumulative gain past year
| Period | CLF Return | S&P 500 |
|---|---|---|
| 1m | +19.3% | +3.6% |
| 3m | +0.4% | +2.7% |
| 6m | +5.8% | +11.4% |
| 1y | +11.9% | +18.7% |
| ytd | -17.1% | +12.3% |
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CLF Fundamental Analysis
Cleveland-Cliffs' revenue has shown a mixed trajectory, with the most recent quarter (Q1 2026) reporting $4.922 billion, a 6.3% YoY increase, but this follows a pattern of sequential declines from $5.092 billion in Q2 2024 to $4.313 billion in Q4 2025. The company remains unprofitable, with a net loss of $237 million in Q1 2026 and a negative gross margin of -1.7%, though the loss narrowed from the -$495 million in Q1 2025, indicating some improvement. The balance sheet shows a debt-to-equity ratio of 1.34 and a current ratio of 1.95, but free cash flow is deeply negative at -$997 million TTM, and the company has negative ROE of -24.2%, reflecting significant financial strain and reliance on external financing.
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
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Valuation Analysis: Is CLF Overvalued?
Given that Cleveland-Cliffs has negative trailing earnings (EPS of -$0.23), the price-to-sales (PS) ratio is the most appropriate valuation metric, currently at 0.35x, which is significantly lower than the industry average of 1.5x, indicating a substantial discount. The forward PE of 19.9x suggests the market expects a return to profitability, but the negative PEG ratio of -0.05 implies that growth expectations are not justifying the multiple. Historically, the PS ratio has ranged from 0.77x to 2.82x over the past five years, and the current level is near the lower end, suggesting the stock is trading at a historically cheap valuation, which could indicate either a value opportunity or reflect the market's skepticism about the company's ability to sustain earnings.
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
Financially, Cleveland-Cliffs is under significant strain. The company has a debt-to-equity ratio of 1.34, and interest expenses of $148M in Q1 2026 eat into already thin margins. With negative gross margins of -1.7% and a net loss of $237M, the company is burning cash, evidenced by -$997M in TTM free cash flow. This level of leverage and cash burn makes the company vulnerable to further steel price declines or operational disruptions, potentially forcing asset sales or equity dilution to meet obligations.
FAQ
The key risks are financial, competitive, and macro. Financially, the company has a high debt-to-equity ratio of 1.34 and negative free cash flow of -$997M, which could lead to liquidity issues. Competitively, more efficient producers like Steel Dynamics are gaining market share, and tariffs could be reduced. Macro risks include a slowdown in steel demand due to economic weakness, which would hurt pricing and volumes. The stock's high beta of 2.115 means it is highly sensitive to market swings, amplifying losses in downturns. The most severe risk is a decline to the 52-week low of $7.73, representing a -31% loss from the current price.
The 12-month forecast is uncertain, with three scenarios. The bull case (30% probability) sees the stock reaching $13-$15 if steel demand remains strong and the company achieves profitability. The base case (45% probability) expects the stock to trade around $10.50-$12.50, near the average analyst target of $11.80, as the company makes gradual progress. The bear case (25% probability) could see the stock fall to $7.73-$10.00 if steel prices decline and financial strain worsens. The most likely scenario is the base case, which assumes stable steel prices and continued operational improvements, but the outcome is highly dependent on the steel cycle and management execution.
CLF is trading at a significant discount to its historical valuation. The PS ratio of 0.35x is well below the 5-year range of 0.77x-2.82x and the industry average of 1.5x, suggesting the market is pricing in substantial pessimism. The forward PE of 19.9x indicates expectations of a return to profitability, but the negative PEG ratio of -0.05 implies that growth is not justifying the multiple. Overall, the stock appears undervalued on a sales basis, but the lack of earnings makes traditional valuation metrics less reliable. The market is likely pricing in a high probability of continued losses, which is why the stock trades at such a low multiple.
CLF is a high-risk, high-reward opportunity. With a PS ratio of 0.35x versus the industry average of 1.5x, the stock is deeply undervalued on a sales basis. However, the company is unprofitable with negative free cash flow, making it a speculative bet on a steel cycle recovery. The average analyst target of $11.80 implies only 4.7% upside, but the high target of $15.00 offers 33% upside. It could be a good buy for investors with a high risk tolerance who believe in the turnaround, but it is not suitable for conservative investors. The biggest downside risk is a decline to the 52-week low of $7.73, representing a -31% loss.
CLF is more suitable for long-term investors with a high risk tolerance, as the company is in a turnaround phase that may take several quarters to show results. The stock is highly volatile with a beta of 2.115, making it unsuitable for short-term trading unless one can time the steel cycle. The company pays no dividend, so investors rely solely on capital appreciation. Given the cyclical nature of the steel industry and the company's high leverage, a minimum holding period of 3-5 years is recommended to allow for a full cycle recovery. Short-term investors may find better opportunities elsewhere due to the high risk of price swings.