Cleveland-Cliffs price target raised to $11 from $7.25 at Jefferies

Investing.com - Jefferies raised its price target on Cleveland-Cliffs (NYSE:CLF) to $11.00 from $7.25 while maintaining a Hold rating on the stock. The steel producer, currently trading at $10.66 with a market capitalization of $5.28 billion, has shown strong returns in recent months according to InvestingPro data.

The firm cited Cleveland-Cliffs’ stronger-than-expected second-quarter EBITDA of $97 million, which surpassed consensus expectations of an EBITDA loss. The steel producer outperformed on costs and demonstrated solid operational performance during the quarter, despite operating with significant debt burden of $7.62 billion.

Despite reporting negative free cash flow, Jefferies noted that Cleveland-Cliffs’ cash flow should improve in the second half of the year. The firm also highlighted that potential non-core asset sales could help accelerate the company’s deleveraging efforts. InvestingPro analysis reveals the company maintains a healthy current ratio of 2.13, indicating sufficient liquidity to meet short-term obligations.

Jefferies identified steel price risk as the key ongoing concern for Cleveland-Cliffs, though it acknowledged that management is "taking steps in the right direction."

The improved price target represents a significant increase of approximately 52% from the previous target of $7.25, reflecting Jefferies’ more positive outlook on Cleveland-Cliffs’ financial performance.

In other recent news, Cleveland-Cliffs reported a positive earnings surprise for the second quarter of 2025. The company exceeded expectations with an earnings per share (EPS) of -0.5, surpassing the forecasted -0.71. Revenue also outperformed estimates, reaching $4.9 billion compared to the anticipated $4.85 billion. Citi responded to these results by raising its price target for Cleveland-Cliffs from $7.50 to $11.00, although it maintained a Neutral rating, indicating a cautious outlook on the company’s near-term prospects. The investment bank set third-quarter EBITDA expectations at $200 million, based on guidance provided by Cleveland-Cliffs. Additionally, Citi projects an annual EBITDA run-rate of approximately $1.2 billion, assuming further cost reductions in the fourth quarter. Cleveland-Cliffs continues to explore non-core asset sales and has raised the possibility of monetizing core assets to accelerate debt reduction. The company’s operational improvements, including record shipments and reduced costs, signal a potential turnaround amid challenging market conditions.

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