Intel stock spikes after report of possible US government stake
Investing.com - JPMorgan resumed coverage of Cleveland-Cliffs (NYSE:CLF) with a Neutral rating and a price target of $7.50 on Monday. The stock currently trades at $9.87, with a market capitalization of $4.88 billion. According to InvestingPro analysis, the stock is trading slightly above its Fair Value.
The investment bank assigned a 6.5x 2026 EV/EBITDA multiple to Cleveland-Cliffs, representing a premium to the company’s historical average of approximately 5.5x and its one-year average of about 6.2x.
JPMorgan justified the premium based on protectionism potentially leading to higher through-cycle profitability for U.S.-based mills, along with national security backing from the Trump administration.
The price target still reflects a 1.5x discount compared to the 8.0x multiple used for mini-mill peers, which JPMorgan attributed to Cleveland-Cliffs’ debt load and less product diversification.
JPMorgan noted that beyond second-quarter earnings, a potential positive catalyst for Cleveland-Cliffs could be a Canadian tariff reprieve announcement in the coming weeks or months, though shares might decline in the meantime. With a beta of 1.91, InvestingPro analysis shows the stock exhibits significant volatility compared to the broader market. Subscribers can access 13 additional ProTips and comprehensive financial metrics for deeper analysis.
In other recent news, Cleveland-Cliffs has been the focus of several significant developments. S&P Global Ratings revised the outlook for Cleveland-Cliffs to negative, maintaining its ’BB-’ issuer credit rating due to weaker earnings and cash flows. The company’s adjusted EBITDA for fiscal 2025 is projected to be between $800 million and $1 billion, showing improvement over fiscal 2024 but still significantly below fiscal 2023 levels. Additionally, Cleveland-Cliffs has faced analyst downgrades, with Jefferies lowering its rating from Buy to Hold and GLJ Research downgrading from Buy to Sell, citing concerns over increased competition and high leverage. GLJ Research set a new price target of $3.91, reflecting a reassessment of the company’s prospects amid industry challenges.
In another recent development, the U.S. government is negotiating a potential deal with Mexico that could ease tariffs on Mexican steel imports, potentially impacting domestic producers like Cleveland-Cliffs. The Commerce Secretary is reportedly leading these discussions, which are ongoing and have not yet been finalized. Moreover, President Trump has officially doubled tariffs on steel and aluminum, a move that could affect market dynamics and pricing for Cleveland-Cliffs. These combined factors present a complex landscape for the company as it navigates industry shifts and financial pressures.
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