Shares of steelmaker Cleveland-Cliffs (NYSE:CLF) gained over 3% in Friday afternoon’s trading after catching a new analyst upgrade. The latest analyst word comes from JPMorgan analyst Bill Peterson, who noted that the likely comebacks in the automotive sector—which is Cleveland-Cliffs’ biggest end-user market—will help drive gains. With the UAW strike settled and inventory levels needing to be rebuilt, there’s going to be a call for more steel in the near term.
Plus, Cleveland-Cliffs has been aggressively deleveraging, which will cut costs. And with Cleveland-Cliffs’ capital expenditure needs now at their minimum, a lot more revenue can flow directly to the bottom line. That was enough for Peterson to push Cleveland-Cliffs shares from Neutral to Overweight with a $24 price target.
Mixed Sentiment Followed
As is commonly the case, not everyone agrees. David Coleman with Argus, for example, downgraded Cleveland-Cliffs shares from Buy to Hold. While Coleman did share the opinion that Cleveland-Cliffs is being run well, he also noted that earnings are going to be in a down cycle, mostly based on pricing. Plus, there’s been an overall bearish pattern to Cleveland-Cliffs shares that goes back almost two years. However, one final point rang out strong: Ron Bloom, a company director, increased his Cleveland-Cliffs holdings by more than 10-fold recently. An insider buy like that is hard to ignore.
Is Cleveland-Cliffs a Buy or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on CLF stock based on two Buys, two Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 0.35% loss in its share price over the past year, the average CLF price target of $19.85 per share implies 0.5% downside risk.
