Cleveland-Cliffs Inc. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

It's been a sad week for Cleveland-Cliffs Inc. (NYSE:CLF), who've watched their investment drop 12% to US$18.23 in the week since the company reported its first-quarter result. It was a pretty negative result overall, with revenues of US$5.2b missing analyst predictions by 2.5%. Worse, the business reported a statutory loss of US$0.14 per share, a substantial decline on analyst expectations of a profit. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Cleveland-Cliffs after the latest results.

Check out our latest analysis for Cleveland-Cliffs

After the latest results, the consensus from Cleveland-Cliffs' nine analysts is for revenues of US$21.2b in 2024, which would reflect a noticeable 3.3% decline in revenue compared to the last year of performance. Statutory earnings per share are expected to plunge 39% to US$0.50 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$21.4b and earnings per share (EPS) of US$1.34 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the pretty serious reduction to new EPS forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$21.13, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Cleveland-Cliffs, with the most bullish analyst valuing it at US$25.00 and the most bearish at US$15.50 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 4.4% by the end of 2024. This indicates a significant reduction from annual growth of 41% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.8% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Cleveland-Cliffs is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Cleveland-Cliffs. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Cleveland-Cliffs going out to 2026, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 2 warning signs for Cleveland-Cliffs that you need to be mindful of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.