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Cleveland-Cliffs (NYSE:CLF) reported a relatively mundane q1’24 as the firm faces some headwinds and geopolitical pressure in the steel markets. As the domestic market gyrates between automotive OEM production and service center orders, China is drawing down steel inventory in an attempt to normalize localized steel prices by selling internationally. Though I anticipate this to have minimal impact on Cleveland-Cliffs’ long-term steel sales premiums through their decarbonizing initiatives, I do anticipate some near-term headwinds as the firm navigates through eq2’24. Given my positive long-term outlook for the firm, the expansion of shareholder benefits through buybacks, and management’s deleveraging initiatives, I provide CLF shares with a BUY recommendation with a price target of $28.05/share at 4.29x eFY25 EV/aEBITDA.
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