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Investing.com - KeyBanc has lowered its price target on Cleveland-Cliffs (NYSE:CLF) to $13.00 from $15.00 while maintaining an Overweight rating on the stock. CLF currently trades at $10.43, representing a 25% upside to KeyBanc’s target, though the stock has declined 12.13% in the past week. According to InvestingPro, analysts’ targets range from $7.60 to $16.00.
The price target reduction reflects approximately 15% dilution following Cleveland-Cliffs’ secondary common stock offering, according to KeyBanc. InvestingPro data shows the company operates with a significant debt burden of $8.06 billion and a debt-to-equity ratio of 1.47.
Despite the lower price target, the firm maintains its Overweight rating on Cleveland-Cliffs, citing potential improvements to the company’s capital structure in the near future.
KeyBanc specifically mentioned cash associated with the POSCO Memorandum of Understanding (MoU) and other potential asset sales as key factors that could unlock value for the company.
The firm described Cleveland-Cliffs as a "special situation" heading into year-end, suggesting these upcoming developments could positively impact the company’s valuation.
In other recent news, Cleveland-Cliffs Inc. announced the pricing of its underwritten public offering of 75 million common shares at approximately $12.85 per share, aiming to raise $964 million in gross proceeds before discounts and expenses. The company has provided UBS Securities LLC with a 30-day option to purchase an additional 11.25 million shares. This offering is part of Cleveland-Cliffs’ strategy to repay borrowings under its asset-based credit facility and to allocate remaining funds for general corporate purposes. Additionally, Cleveland-Cliffs has filed an underwriting agreement with UBS Securities as part of its ongoing securities registration process, although specific terms were not disclosed.
Furthermore, Cleveland-Cliffs has named South Korea’s POSCO as a strategic partner under a previously announced memorandum of understanding. This alliance aims to support POSCO’s U.S. customer base and ensure compliance with U.S. trade and origin requirements. The partnership follows a newly completed U.S.-Korea trade agreement, enhancing Cleveland-Cliffs’ strategic position. These recent developments highlight the company’s ongoing efforts to strengthen its financial and operational strategies.
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