Why Cleveland-Cliffs (CLF) Is Getting Fresh Attention Now

Cleveland-Cliffs (CLF) drew fresh attention after the U.S. Department of Energy set a framework to finalize a shared US$1b optimization project at its Middletown Works steel facility.

The DOE backed project has arrived during a mixed period for Cleveland-Cliffs, with the share price falling about 14% year to date and over the past 90 days, yet still delivering an 8.1% total shareholder return over the past year. Investors appear to be weighing these longer term gains against more recent share price volatility. This fresh US$1b commitment is likely feeding into shifting expectations around the company’s risk profile and future cash generation.

Spot opportunities around Cleveland-Cliffs’ latest DOE backed upgrade by scanning a curated 38 power grid technology and infrastructure stocks, which could also benefit from long term investment in energy efficient industrial infrastructure.

After a choppy year for Cleveland-Cliffs, plus a fresh US$1b project on the table, the key valuation tension is clear. Is most of the potential already in the stock, or could the bigger upside still lie ahead?

Most Popular Narrative: 30% Undervalued

Cleveland-Cliffs’ most followed valuation narrative puts fair value at $11.65 per share compared with the latest close around $11.62. That small gap hides some punchy assumptions inside the model.

New investments in higher-margin stainless and specialty steels, buoyed by infrastructure investment, electrification, and clean-energy buildout, will expand Cleveland-Cliffs’ addressable markets and support lasting product mix improvement, increasing revenue growth and supporting higher average selling prices.

Read the complete narrative. Read the complete narrative.

Want to see what is driving that fair value call for Cleveland-Cliffs? The narrative leans heavily on future revenue growth, improving margins and a different earnings mix. Curious which specific earnings and valuation assumptions need to fall into place.

Result: Fair Value of $11.65 (UNDERVALUED)

Have a read of the narrative in full and understand what’s behind the forecasts.

However, Cleveland-Cliffs still faces two key swing factors: any easing of U.S. steel tariffs and pressure to upgrade older blast furnace assets for decarbonization.

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

Next Steps

Given the mix of optimism and concern around Cleveland-Cliffs right now, it makes sense to move quickly and test the numbers yourself. To see how the key pluses and minuses stack up in one place, start with our breakdown of the 3 key rewards and 3 important warning signs

Looking for more investment ideas beyond Cleveland-Cliffs?

If you are serious about building a stronger portfolio, do not stop with Cleveland-Cliffs. Use the Simply Wall Street Screener to uncover fresh opportunities before others move first.

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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