Last Update 21 Mar 26

Fair value Decreased 2.49%

CLF: Tariff Support And Auto Contract Wins Will Shape Future Returns

The analyst price target for Cleveland-Cliffs has been adjusted slightly lower to reflect a new fair value estimate of about $13.08, as analysts weigh mixed rating changes, valuation concerns, and updated expectations for margins and future P/E multiples.

Analyst Commentary

Recent research on Cleveland-Cliffs reflects a divided view, with some analysts focusing on potential upside from pricing, tariffs, and growth initiatives, while others point to valuation, costs, and execution risks around upcoming results and leadership actions.

Bullish Takeaways

Bullish analysts see a potential opportunity tied to expectations that U.S. steel prices could stay firm, which they view as supportive for earnings power and the company’s ability to justify higher P/E multiples over time.
Some research highlights a "potentially transformational opportunity" for Cleveland-Cliffs, suggesting that if management executes on growth plans, the company’s longer term earnings profile could support a higher fair value range.
Auto contract market share wins, stronger liquidity, and progress on non core asset sales are seen as positives that could help fund growth, support the balance sheet, and reduce execution risk on future projects.
One large Wall Street bank raised its rating to Overweight and lifted its price target, signaling more confidence in the company’s ability to convert its operating position and tariff backdrop into better long term returns for shareholders.

Bearish Takeaways

Bearish analysts point to valuation as a key concern, arguing that the shares are already pricing in "a lot of good news" ahead of upcoming results, which limits room for error if margins or volumes fall short of expectations.
Some research characterizes Cleveland-Cliffs as the "worst house in a troubled neighborhood," reflecting skepticism that the company can match even its peers on execution, cost control, and capital allocation, which weighs on how much investors may be willing to pay on a P/E basis.
Higher reported costs tied to a richer product mix are flagged as a headwind, with concerns that modest cost pressure could squeeze margins and make it harder for the company to meet or exceed the assumptions embedded in current valuation models.
Recent commentary includes a price target trimmed by a small amount and increased attention on insider stock sales by the CEO after the Q4 report, which some investors may read as a signal to be cautious on near term execution or risk around upcoming earnings catalysts.

What’s in the News

White House officials indicated there will not be any changes to existing U.S. tariffs on steel, aluminum and related products unless President Trump personally announces them, with Cleveland-Cliffs cited among affected steel producers (Reuters).
A Trump administration official described the current approach as a "nimble and nuanced tariff agenda" aimed at increasing U.S. output in steel, aluminum and other manufacturing industries, which includes Cleveland-Cliffs among publicly traded peers (Reuters).
Separate reporting indicated President Trump is reviewing existing tariffs of up to 50% on some steel and aluminum imports, with potential exemptions for certain items as part of efforts to address an affordability crisis, again listing Cleveland-Cliffs among companies in the space (Financial Times).
The administration is also said to be considering more targeted national security reviews on specific steel and aluminum products, a process that could influence how tariffs apply across producers such as Cleveland-Cliffs and its peers (Financial Times).
From October 1, 2025 to December 31, 2025, Cleveland-Cliffs reported no share repurchases, and reported cumulative repurchases of 7,507,249 shares, or 1.58%, for US$124.22 million under the buyback program announced on April 22, 2024.

Valuation Changes

Fair Value: The updated fair value estimate is $13.08, slightly lower than the previous estimate of $13.41.
Discount Rate: The discount rate has increased from 11.59% to 12.33%, indicating a higher required return in the model.
Revenue Growth: The revenue growth assumption is effectively unchanged, moving from 4.83% to 4.82%.
Net Profit Margin: The net profit margin assumption has increased from 14.40% to 19.05%.
Future P/E: The assumed future P/E multiple has been reduced from 4.21x to 3.17x.

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Key Takeaways

Strong domestic demand, tariff protection, and OEM reshoring drive higher sales volume, pricing power, and improved profit margins for Cleveland-Cliffs.
Cost reductions, asset sales, and investments in specialty steels enhance financial resilience, market expansion, and support structurally higher earnings.
Reliance on protectionist steel tariffs, legacy blast furnace technology, and high automotive exposure pose structural risks to competitiveness, profitability, and market relevance as industry trends evolve.

Catalysts

About Cleveland-Cliffs

Operates as a flat-rolled steel producer in the United States, Canada, and internationally.What are the underlying business or industry changes driving this perspective?

Sustained enforcement and recent increases of U.S. steel tariffs have materially reduced imports, driving higher domestic demand and pricing power for Cleveland-Cliffs. This, along with reshoring in automotive and appliances, positions the company to benefit from greater sales volumes and improved revenue visibility as protectionist trade policy endures.
OEMs are shifting automotive manufacturing capacity and supply chains back to the United States, accelerating orders for domestically produced steel. Cleveland-Cliffs' underutilized automotive steel capacity and established OEM relationships enable rapid volume ramp-up, directly supporting potential EBITDA growth and net margin expansion as demand recovers.
Strategic footprint optimization, internal coke and feedstock integration, and direct moves to lower fixed costs and SG&A have already resulted in unit cost reductions. Ongoing initiatives are expected to deliver further cost savings, driving enhanced free cash flow, lower leverage, and a structurally higher earnings profile through improved operating margins.
Asset sales and ongoing working capital reductions are set to accelerate deleveraging and unlock latent value. Proceeds from noncore divestitures provide additional flexibility for debt paydown, lowering interest costs and improving both net margins and financial resilience.
New investments in higher-margin stainless and specialty steels, buoyed by infrastructure investment, electrification, and clean-energy buildout, will expand Cleveland-Cliffs' addressable markets and support lasting product mix improvement, increasing revenue growth and supporting higher average selling prices.

Cleveland-Cliffs Earnings and Revenue Growth

Cleveland-Cliffs Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Cleveland-Cliffs's revenue will grow by 4.8% annually over the next 3 years.
Analysts are not forecasting that Cleveland-Cliffs will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Cleveland-Cliffs's profit margin will increase from -7.9% to the average US Metals and Mining industry of 19.1% in 3 years.
If Cleveland-Cliffs's profit margin were to converge on the industry average, you could expect earnings to reach $4.1 billion (and earnings per share of $5.84) by about March 2029, up from -$1.5 billion today.
In order for the above numbers to justify the price target of the analysts, the company would need to trade at a PE ratio of 3.2x on those 2029 earnings, up from -3.0x today. This future PE is lower than the current PE for the US Metals and Mining industry at 20.0x.
Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 12.33%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

Cleveland-Cliffs' long-term competitiveness and cost structure remain heavily dependent on the continued enforcement of Section 232 steel tariffs; any softening, exemptions, or eventual removal of these protectionist trade measures could re-expose the company to global overcapacity and price competition, negatively impacting revenue and net margins.
The company's integrated blast furnace footprint relies on coal, coke, and natural gas, with management confirming the absence of near-term hydrogen-based decarbonization projects; persisting with legacy steelmaking technologies exposes Cliffs to escalating regulatory costs and customer pressures stemming from global decarbonization trends, leading to higher capex requirements and possible demand risks as automotive and industrial clients seek greener alternatives.
Elevated leverage from recent acquisitions is only partially offset by targeted asset sales; if working capital releases and noncore divestitures fall short or market conditions deteriorate, Cleveland-Cliffs' ability to rapidly deleverage and reduce interest burden may be constrained, increasing earnings volatility and risk to free cash flow.
The company faces significant exposure to automotive OEMs, with recovery in volumes and capacity utilization tied to U.S. auto production; any structural shift toward lighter, alternative materials, slow EV adoption rates, or persistent consumer financing challenges could erode steel intensity in vehicles and pressure Cleveland-Cliffs' long-term revenue base and pricing power.
The ongoing shift in the North American steel market towards electric arc furnace (EAF) mini-mills and increased reliance on scrap-based steel threatens Cliffs' market share and profit margins in the long term, as its existing blast furnace operations may become less cost-competitive and require substantial reinvestment to remain relevant in a decarbonizing industry.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $13.08 for Cleveland-Cliffs based on their expectations of its future earnings growth, profit margins and other risk factors.
However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $16.8, and the most bearish reporting a price target of just $8.9.
In order for you to agree with the analysts, you'd need to believe that by 2029, revenues will be $21.4 billion, earnings will come to $4.1 billion, and it would be trading on a PE ratio of 3.2x, assuming you use a discount rate of 12.3%.
Given the current share price of $7.82, the analyst price target of $13.08 is 40.2% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

CLF: Tariff Pressures And New Auto Contracts Will Shape Fair Value Outlook