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The company reported its strongest quarterly performance in three years, swinging from a loss in the previous quarter to a profit of $165 million. While revenue of $5.6 billion was slightly lower than what analysts expected, the company was much more efficient at turning those sales into profit. It shipped 4.2 million tons of steel during the period.
Management also issued a confident outlook for next year, forecasting that a key measure of cash profit will exceed $4 billion in 2027. This suggests the company is successfully moving past a recent slump in the steel market. The stock rose about 17 percent following the report, as the results showed the business is recovering faster than many had anticipated.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
Wells Fargo upgraded the stock on October 6, moving it to their top-tier rating. This change suggests the firm sees a better path for the company even as the average price target across all analysts remains around $12.
An upgrade from a major firm like Wells Fargo often reflects a shift in how professional analysts view the company's ability to handle the ups and downs of the steel market. It indicates that the current price may not fully reflect the company's potential as it modernizes its plants and focuses on high-value steel for the automotive industry.
Source: Wells Fargo
The Trump administration has rolled back tougher fuel-economy rules for vehicles. The new standard requires an average of 34.5 miles per gallon by 2031, a sharp drop from the previous target of over 50 miles per gallon.
This change matters because Cleveland-Cliffs is a major supplier of high-end steel used in electric vehicles and power grids. Lower fuel-economy requirements often slow the shift toward electric cars, which could reduce the immediate need for the specialized, high-margin electrical steels that the company has been betting its future on.
Source: WSJ
President Trump is expected to announce a plan by Mesabi Metallics to invest about 15 billion dollars in a new steel facility in Iowa. This would be the largest steel plant in the country and is aimed at starting production by 2030.
For Cleveland-Cliffs, this represents a potential long-term threat to its dominance in the domestic market. While the plant is years away from producing steel, a massive increase in U.S. capacity can lead to lower prices across the industry if demand does not grow fast enough to match it.
Source: CNBC
GLJ Research raised its price target for the stock from 15.60 to 17.48 dollars while keeping its buy rating. This suggests the firm sees more room for the stock to rise than it did previously. Other analysts have been more cautious lately, with the average target across all firms sitting at 12 dollars. While one firm's target change is routine, it highlights a divide between those who see a recovery coming and the broader group that expects the stock to stay near its current price.
Source: GLJ Research
Management has built a streak of beating their own profit targets for six straight quarters, showing they have a firm handle on costs even when steel prices are volatile.
| Expectation | |
|---|---|
| EPS | $0.21 |
| Revenue | $5.69B |
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