Cleveland-Cliffs (CLF) Could Be 3% Below Fair Value After Wells Fargo Upgrade

Cleveland-Cliffs upgrade puts earnings expectations in focus

Wells Fargo’s upgrade of Cleveland-Cliffs (CLF) centers on a simple tension. The bank sees near-term earnings potential as stronger than feared, even as investors weigh possible future steel supply from a planned Iowa mill.

Cleveland-Cliffs shares closed at US$12.06, with a 7-day share price return of 9.54% and a 90-day gain of 28.30%. However, the year-to-date share price is down 11.32% and the 1-year total shareholder return declined 13.24%, pointing to momentum rebuilding after a tougher stretch.

Scan beyond Cleveland-Cliffs and compare this upgrade-driven interest with other materials players included on our hand-picked list of 29 high quality undervalued stocks.

Bulls argue Cleveland-Cliffs is being priced on fear of future supply. Bears focus on current losses and a mixed return record. The valuation work now shows which side the near-term numbers support.

Most Popular Narrative: 3% Undervalued

Cleveland-Cliffs is framed as modestly cheap in the most followed valuation storyline, with a fair value of $12.40 against the $12.06 last close, which puts every earnings update under a brighter spotlight.

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.

See why 60 investors see Cleveland-Cliffs as 3% undervalued.

Result: Fair Value of $12.40 (UNDERVALUED)

Still, the story can change quickly if Section 232 steel tariffs are relaxed or if Cleveland-Cliffs faces pressure to fund costly decarbonization upgrades sooner than expected.

Find out about the key risks to this Cleveland-Cliffs narrative.

Next Steps

Sentiment on Cleveland-Cliffs is split, with some investors worried about risks while others focus on potential upside. Move quickly, study the numbers, and weigh both sides through the 3 key rewards and 2 important warning signs.

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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.

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