Cleveland-Cliffs (CLF – Research Report), the Basic Materials sector company, was revisited by a Wall Street analyst yesterday. Analyst Carlos De Alba from Morgan Stanley maintained a Hold rating on the stock and has a $11.00 price target.
Carlos De Alba has given his Hold rating due to a combination of factors affecting Cleveland-Cliffs’ financial performance. The company’s fourth-quarter revenue slightly missed the consensus estimates, and its adjusted EBITDA was below expectations, although it was marginally better than the preliminary guidance. Additionally, the reported adjusted EPS aligned with consensus but fell short of internal projections.
Carlos De Alba’s rating is also influenced by the company’s cash flow from operations, which was significantly lower than anticipated due to a larger than expected build in working capital and weaker operating results. Furthermore, the company’s net debt position was higher than expected, leading to a high net debt to adjusted EBITDA ratio. The 2025 outlook for Cleveland-Cliffs is underwhelming, with projected reductions in steel unit costs and higher SG&A expenses than consensus estimates, contributing to a cautious stance on the stock.