Cleveland Cliffs Inc (CLF)

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Cleveland-Cliffs jumps to five-month high after Morgan Stanley upgrade

Jan. 12, 2023 11:24 AM ETCleveland-Cliffs Inc. (CLF)By: Carl Surran, SA News Editor14 Comments


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Cleveland-Cliffs (NYSE:CLF) +4.4% in Thursday's trading after Morgan Stanley upgraded shares to Overweight from Equal Weight with a $26 price target, raised from $13.60, citing sequentially higher annual fixed price contracts, which should allow it to cope with lower forecast spot steel prices and generate strong free cash flow yields in the coming years.
Morgan Stanley analyst Carlos de Alba also believes consensus estimates do not fully reflect announced increases in annual fixed price contracts, which should lead to positive 2023 earnings revisions and result in further tailwinds for the stock.
The analyst said a near-term catalyst for Cleveland-Cliffs (CLF) should be the Q4 earnings release, which should provide further clarity and greater confidence to the market as "historically the company provides guidance for their expected average selling price for the year."
Cleveland-Cliffs' (CLF) "turnaround continues to result in rapid debt reduction and a low-risk, low-carbon domestic steel supply chain, with products going high up the value chain," Leo Nelissen writes in an analysis posted recently on Seeking Alpha.