Steelmaker Cleveland-Cliffs (CLF) remains interested in acquiring all or parts of U.S. Steel (X) after President Biden blocked its $14 billion sale to Nippon Steel (JP:5401). However, a report from Semafor suggests that Cleveland-Cliffs can’t afford a full buyout at U.S. Steel’s current price of roughly $33 per share and may focus instead on acquiring select assets rather than the whole company.
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Cleveland-Cliffs CEO Lourenco Goncalves has repeatedly expressed his interest in U.S. Steel, even preparing bids in case the Nippon Steel deal fell apart. He previously indicated that he would be willing to bid for shares priced in the $30 range and emphasized plans to invest in union-backed plants if given the opportunity. Notably, Cliffs had offered $54 per share in a cash and stock bid before U.S. Steel agreed to Nippon’s $55 per share all-cash offer.
Meanwhile, U.S. Steel CEO David Burritt urged President-elect Trump to overturn Biden’s decision after calling it “corrupt” and appealing for a fair review. U.S. Steel and Nippon Steel have also filed lawsuits, including one against Cleveland-Cliffs and its CEO for allegedly coordinating actions to block the original transaction. Burritt remains hopeful that a change in leadership could revive the deal.
Is X Stock a Buy or Sell?
Turning to Wall Street, analysts have a Strong Buy consensus rating on X stock based on four Buys, one Hold, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 31% decline in its share price over the past year, the average X price target of $44 per share implies 32.5% upside potential.
