Cleveland-Cliffs Downgraded As Upside Looks Fully Valued: Analyst

KeyBanc Capital Markets analyst Philip Gibbs downgraded Cleveland-Cliffs Inc (NYSE:CLF) from Overweight to Sector Weight.

The company’s most anticipated catalysts have played out and Cleveland-Cliffs faces modestly higher costs due to a richer product mix, Gibbs says.

The Cleveland-Cliffs Thesis: The Cleveland, Ohio-based company's stock valuation "now better embeds pending non-core asset sales and strategic joint ventures with POSCO (Korea's largest steelmaker) to re-engineer/deleverage the balance sheet," Gibbs wrote.

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Cleveland-Cliffs could strike an accretive agreement with POSCO, though there is lack of visibility around the details, he added.  

The analyst lowered the EBITDA estimate for the fourth quarter to a loss of $22 million, from the earlier projection of a profit of $63 million, citing "lag spot pricing and modestly higher costs."

The 2026 EBITDA estimate was reduced to $1.33 billion, from the earlier estimate of $1.63 billion, "to largely reflect higher steel unit costs vs. our prior estimate to better express a richer mix of auto business and more finished steel shipments to replace the lapse of CLF's ~1.5Mtpa slab contract with ArcelorMittal SA (NYSE:MT) in December 2025," he further wrote.

CLF Price Action: Shares of Cleveland-Cliffs had declined by 6.78% to $12.36 at the time of publication on Wednesday.

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