Cleveland-Cliffs (CLF – Research Report), the Basic Materials sector company, was revisited by a Wall Street analyst yesterday. Analyst Alexander Hacking from Citi remains neutral on the stock and has a $22.00 price target.
Alexander Hacking has given his Buy rating due to a combination of factors surrounding Cleveland-Cliffs’s financial performance and future plans. In the fourth quarter, the company reported adjusted EBITDA that matched Citi’s expectations, showcasing strong free cash flow and a reduction in net debt to below their targeted amount. Additionally, Cleveland-Cliffs has expressed an intention for aggressive share buybacks, which is a positive signal to investors. The company’s cost reduction strategies, which have already seen a significant drop in the fourth quarter, are expected to continue, providing further optimism for financial efficiency and margin improvement in the forthcoming fiscal year.
Furthermore, the shipment volumes in the fourth quarter were robust, with a shift in sales mix towards more automotive and fewer service center shipments. Despite a decrease in the realized price per ton, the cost per ton also fell, demonstrating effective cost management. Cleveland-Cliffs’s performance indicates resilience in operational efficiency and a promising outlook that supports the Buy rating. The anticipated focus areas for future discussions, including mergers and acquisitions, further share buybacks, automotive contracts, and outlook for the first quarter and the year 2024, underpin the positive sentiment for the company’s stock.
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Cleveland-Cliffs (CLF) Company Description:
Cleveland-Cliffs, Inc. is an iron ore mining company. It supplies iron ore pellets to the North American steel industry from mines and pellet plants located in Michigan and Minnesota. It operates through the following segments: Mining & Pelletizing and Metallics. The Mining & Pelletizing segment owns operational iron ore mines plus and indefinitely idled mine. The Metallics segment constructs an HBI production plant in Toledo, Ohio. The company was founded in 1847 and is headquartered in Cleveland, OH.
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