Analysts have raised their fair value estimate for Cleveland-Cliffs from $11.31 to $11.57 per share. This update is based on improved cost performance, anticipated tariff benefits, and a more favorable risk/reward outlook for the company.

Analyst Commentary

Recent research has provided a balanced outlook on Cleveland-Cliffs, with opposing views emerging around valuations, growth prospects, and operational execution. The company has received both upgrades and neutral initiations, reflecting differing expectations for its trajectory in the coming years.

Bullish Takeaways

• Bullish analysts expect Cleveland-Cliffs to benefit from anticipated tariff advantages, which could provide near-term support to U.S. steel prices despite current industry demand concerns.
• Improved cost performance and greater efficiency were highlighted following recent earnings, enhancing the company’s risk/reward profile.
• Potential for market share gains, particularly within higher-margin automotive platforms, is seen as a key growth driver. This comes as onshoring trends and trade shifts favor domestic producers.
• There is growing interest in possible changes to Canadian steel trade policy, which could present additional upside opportunities for earnings.

Bearish Takeaways

• Some analysts remain cautious pending evidence of sustained demand improvement, noting that much of the current optimism is based on short-term tariff effects rather than long-term fundamentals.
• Increased domestic supply anticipated in 2026 could pressure pricing and margins, potentially slowing the trajectory of future earnings growth for Cleveland-Cliffs.
• Bearish analysts express reservations about weak steel demand in the U.S., suggesting that industry-wide headwinds could temper the company’s valuation improvements or disrupt growth plans.
• There is less confidence in the global positioning of U.S.-focused players relative to peers with broader international operations. This has resulted in a more cautious approach to upside expectations.

What's in the News

• Canada plans to remove retaliatory tariffs on many U.S. goods but is likely to maintain 25% import taxes on U.S. steel and aluminum products as well as tariffs on U.S. automobiles, potentially impacting Cleveland-Cliffs and other steel producers (Bloomberg).
• The Trump administration has expanded steel and aluminum tariffs by adding 407 additional derivative product codes to those subject to 50% import duties, affecting industry participants such as Cleveland-Cliffs (Reuters).
• Cleveland-Cliffs has secured new multi-year, fixed-price supply contracts with major U.S. automakers, including General Motors. This reflects industry efforts to hedge against potential tariff-driven cost increases (Bloomberg).
• Global steel production is projected to exceed demand, with excess output possibly reaching 721 million tons by 2027. This could intensify competitive pressures for producers like Cleveland-Cliffs (The New York Times).
• President Trump has imposed new tariffs on exports from dozens of countries, with rate increases up to 50% for certain nations. This adds further complexity to the international steel trade landscape (Reuters).

Valuation Changes

• Fair Value Estimate has risen slightly from $11.31 to $11.57 per share, reflecting recent positive developments.
• Discount Rate has edged down from 10.32% to 10.22%, indicating a marginally lower perceived risk profile.
• Revenue Growth Forecast has decreased modestly from 5.87% to 5.81%.
• Net Profit Margin has dipped slightly from 2.66% to 2.63%.
• Future P/E Ratio has increased from 12.94x to 13.36x. This suggests expectations for somewhat higher future earnings multiples.