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1. Company Snapshot

1.a. Company Description

Cleveland-Cliffs Inc.operates as a flat-rolled steel producer in North America.The company offers carbon steel products, such as hot-rolled, cold-rolled, electrogalvanized, hot-dip galvanized, hot-dip galvannealed, aluminized, enameling, and advanced high-strength steel products; stainless steel products; plates; and grain oriented and non-oriented electrical steel products.


It also provides tubular components, including carbon steel, stainless steel, and electric resistance welded tubing.In addition, the company offers tinplate products, such as electrolytic tin coated and chrome coated sheet, and tin mill products; tooling and sampling; raw materials; ingots, rolled blooms, and cast blooms; and hot-briquetted iron products.Further, it owns five iron ore mines in Minnesota and Michigan.


The company serves automotive, infrastructure and manufacturing, distributors and converters, and steel producers.Cleveland-Cliffs Inc.was formerly known as Cliffs Natural Resources Inc.


and changed its name to Cleveland-Cliffs Inc.in August 2017.The company was founded in 1847 and is headquartered in Cleveland, Ohio.

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1.b. Last Insights on CLF

Cleveland-Cliffs' recent performance was negatively impacted by its Q4 earnings report, which showed a loss of $0.43 per share, despite beating earnings estimates. The company's revenue missed estimates, and its full-year net loss was sharply worse than expected. Additionally, several institutional investors, including Fisher Asset Management LLC, Creative Planning, and Commonwealth Equity Services LLC, reduced their stakes in the company, contributing to the stock's downward pressure. The company's 2026 guidance focuses on cost cuts and disciplined spending.

1.c. Company Highlights

2. Cleveland-Cliffs' Turnaround Gains Momentum

Cleveland-Cliffs reported a loss per share of -$0.43 in Q4 2025, beating analyst estimates of -$0.62. Revenue for the quarter was impacted by lower steel shipments and asset utilization, but the company is poised for improvement in 2026, driven by a recovering market and increased demand for domestically produced steel. The company's robust order book and rising steel prices are expected to drive a substantial improvement in realized prices, with an anticipated increase of approximately $60 per ton from 2025.

Publication Date: Feb -14

📋 Highlights
  • Strategic Cost Optimization:: Unit cost reductions continued in 2025 ($40/ton) with $100M+ savings from locked-in coal contracts in 2026.
  • Shipment Projections:: 2026 full-year shipments targeted at 16.5-17M tons, up from 12.2M tons in 2025, driven by improved demand and asset rationalization.
  • Slab Contract Termination Impact:: EBITDA improvement of $400-500M expected in 2026 from ending the ArcelorMittal slab contract, with benefits accelerating in Q2-Q4.
  • Asset Sales and Debt Reduction:: $425M in asset sale proceeds (including $60M already secured) to be used for debt repayment, improving financial flexibility.
  • Price Realization and Tariffs:: 2026 ASP expected to rise $60/ton from 2025, supported by 50% Section 232 tariffs and multi-year fixed-price contracts with OEMs.

Operational Highlights

The company's efforts to restructure its operations are yielding positive results, with the termination of its index-based slab supply contract with ArcelorMittal expected to result in an EBITDA improvement of $400-500 million in 2026. Additionally, the Canadian government's restriction on imported steel into Canada is creating positive momentum for the company's Canadian subsidiary, Stelco, which is expected to be a significant contributor to Cliffs' results in 2026, as noted by Lourenco Goncalves, "Stelco will be a significant contributor to Cliffs' results in 2026."

Valuation and Outlook

With a current P/S Ratio of 0.32, the company's valuation appears reasonable, considering the expected revenue growth of 3.5% next year. The EV/EBITDA ratio of -78.54 suggests that the market is pricing in significant challenges, but the company's improving operational performance and rising steel prices could lead to a revaluation. As the company continues to focus on generating EBITDA and cash flow, investors may want to monitor the company's progress in paying down debt and achieving its asset sale targets.

Cost Structure and Profitability

The company's unit cost reductions continue, with another $40 per ton reduced in 2025, and further momentum expected in 2026, driven by locked-in coal contracts generating over $100 million of savings year-over-year. The company's focus on cost management and improving utilization is expected to drive profitability, with the expiration of the slab contract and a richer mix expected to contribute to a decline in costs of $10 per ton in 2026.

3. NewsRoom

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Cleveland-Cliffs: A Bet On 2026 Recovery I Am Not Willing To Take

Feb -17

Source: seekingalpha.com

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Prem Watsa's Strategic Moves: Orla Mining Ltd Sees a -13.01% Impact

Feb -17

Source: gurufocus.com

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Is Cleveland-Cliffs Stock a Steal Buy After Falling Off the Cliff This Week?

Feb -13

Source: fool.com

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Nucor, Cleveland-Cliffs, Alcoa Slide As Trump Reportedly Mulls Steel & Aluminum Tariff Rollback

Feb -13

Source: benzinga.com

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Steel stocks are falling as they get a taste of the ‘TACO trade'

Feb -13

Source: marketwatch.com

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This $96 Million Steel Bet Signals Conviction in Cleveland-Cliffs Despite a $1.4 Billion Annual Loss

Feb -12

Source: fool.com

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Cleveland-Cliffs' Q4 Earnings Beat, Revenues Miss Estimates

Feb -10

Source: zacks.com

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Cleveland-Cliffs Sinks After Earnings—Is the Selloff Overdone?

Feb -10

Source: marketbeat.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.83%)

6. Segments

Steelmaking

Expected Growth: 4.83%

Cleveland-Cliffs Inc.'s 4.83% growth in steelmaking is driven by increasing demand from the automotive and construction industries, coupled with the company's strategic acquisitions and investments in modernizing its production facilities. Additionally, the company's focus on producing high-margin, value-added steel products and its ability to pass through raw material costs to customers have contributed to its growth.

Other

Expected Growth: 4.83%

Cleveland-Cliffs Inc.'s 4.83% growth in 'Other' segment is driven by increasing demand for iron ore pellets, rising steel production in the US, and growing exports to Asia. Additionally, the company's cost savings initiatives, improved operational efficiency, and favorable pricing environment have contributed to this growth.

7. Detailed Products

Iron Ore Pellets

High-quality iron ore pellets used as a raw material in steel production

Hot-Briquetted Iron (HBI)

A compacted form of direct reduced iron used as a raw material in steel production

Drill Pipe

High-strength steel pipes used in oil and gas drilling operations

Line Pipe

High-strength steel pipes used in oil and gas transportation

Tubular Products

A range of steel tubular products used in oil and gas, construction, and industrial applications

Flat-Rolled Carbon Steel

A range of flat-rolled carbon steel products used in automotive, construction, and consumer goods industries

Electrical Steel

Specialized steel products used in electrical transformers and motors

8. Cleveland-Cliffs Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Cleveland-Cliffs Inc. is medium due to the availability of alternative materials and products that can replace iron ore and steel.

Bargaining Power Of Customers

The bargaining power of customers for Cleveland-Cliffs Inc. is low due to the company's strong market position and limited customer concentration.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Cleveland-Cliffs Inc. is medium due to the presence of multiple suppliers and the company's ability to negotiate prices.

Threat Of New Entrants

The threat of new entrants for Cleveland-Cliffs Inc. is low due to the high barriers to entry in the iron ore and steel industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry for Cleveland-Cliffs Inc. is high due to the competitive nature of the iron ore and steel industry, with multiple players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 29.04%
Debt Cost 12.25%
Equity Weight 70.96%
Equity Cost 14.41%
WACC 13.78%
Leverage 40.92%

11. Quality Control: Cleveland-Cliffs Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Nucor

A-Score: 5.5/10

Value: 6.6

Growth: 5.8

Quality: 4.7

Yield: 4.0

Momentum: 5.5

Volatility: 6.7

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Cabot

A-Score: 5.4/10

Value: 6.9

Growth: 6.4

Quality: 5.7

Yield: 5.0

Momentum: 1.0

Volatility: 7.3

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Reliance Steel & Aluminum

A-Score: 5.3/10

Value: 4.7

Growth: 6.1

Quality: 5.6

Yield: 3.0

Momentum: 4.0

Volatility: 8.7

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Steel Dynamics

A-Score: 5.2/10

Value: 3.5

Growth: 7.1

Quality: 5.1

Yield: 2.0

Momentum: 7.0

Volatility: 6.3

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CMC

A-Score: 4.2/10

Value: 3.6

Growth: 3.8

Quality: 4.5

Yield: 2.0

Momentum: 5.0

Volatility: 6.3

1-Year Total Return ->

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Cleveland-Cliffs

A-Score: 3.8/10

Value: 9.4

Growth: 3.0

Quality: 3.5

Yield: 0.0

Momentum: 4.5

Volatility: 2.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

10.55$

Current Price

10.55$

Potential

-0.00%

Expected Cash-Flows