Last Updated: 08 Nov 2024
Executive Summary
Cleveland-Cliffs Inc. (CLF) is a leading iron ore mining company with a market capitalization of $6.89 billion. Despite facing challenges in recent quarters, the company's strong fundamentals and positive analyst outlook suggest potential for long-term growth.
Company Overview
Headquartered in Cleveland, Ohio, Cleveland-Cliffs operates iron ore mines in the United States, Canada, and internationally. The company's operations include mining, beneficiation, and pelletizing of iron ore, as well as the production of steelmaking materials.
Fundamental Analysis
Revenue and Earnings: CLF's revenue for the latest twelve months (TTM) was $19.97 billion, with a gross profit of $2.52 billion. The company reported a net loss of $560 million, resulting in diluted earnings per share (EPS) of -$1.13.
Profitability: CLF's profit margins have been negative in recent quarters, with an operating margin of -3.96% and a net profit margin of -2.31%.
Valuation: The company's trailing price-to-earnings ratio is not applicable due to negative earnings. However, its forward price-to-earnings ratio is 45.66, indicating that the market expects a recovery in earnings.
Technical Analysis
Trend Indicators: CLF's 50-day moving average is $12.64, while its 200-day moving average is $16.43. The stock price is currently trading below both moving averages, indicating a bearish trend.
Support and Resistance: Key support levels for CLF include $12.00 and $10.21 (52-week low). Key resistance levels include $14.48 (analyst target price) and $16.43 (200-day moving average).
Short Term Outlook
In the short term, CLF faces headwinds from weak steel demand and high input costs. The company's negative earnings and bearish technical indicators suggest that the stock price may continue to face pressure.
Long Term Outlook
Despite the current challenges, CLF's long-term outlook remains positive. The company has a strong balance sheet, significant iron ore reserves, and a focus on operational efficiency. As the global economy recovers and steel demand increases, CLF is well-positioned to benefit.
Analyst Recommendations
Analysts have a mixed view on CLF. Out of 13 analysts covering the stock, 1 rates it a strong buy, 3 rate it a buy, 6 rate it a hold, 2 rate it a sell, and 1 rates it a strong sell. The median analyst target price is $14.48, implying a potential upside of 8.3%.
