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Investing.com - KeyBanc upgraded Cleveland-Cliffs (NYSE:CLF) from Sector Weight to Overweight and set a price target of $14.00 following the company’s second-quarter 2025 earnings report. The stock, currently trading at $10.66, has shown strong momentum with a 17.5% gain over the past week. According to InvestingPro data, the stock is trading near its Fair Value.
The upgrade reflects improved cost and efficiency performance at Cleveland-Cliffs, according to KeyBanc’s analysis released Tuesday.
KeyBanc cited potential share gains across Cleveland-Cliffs’ higher-margin automotive platform, particularly in light of Section 232 tariffs and manufacturing onshoring trends.
The firm also expressed interest in possible changes to Canadian steel trade policy that could boost earnings for Stelco (TSX:STLC), a company in the same sector.
KeyBanc noted Cleveland-Cliffs’ formalized sales process for non-core assets, including idled facilities, which could help reduce the company’s leverage in coming quarters. The company’s current ratio of 2.04 indicates strong liquidity, though total debt remains significant at $7.7 billion.
In other recent news, Cleveland-Cliffs reported a positive earnings surprise for the second quarter of 2025, with an earnings per share (EPS) of -0.5, surpassing the forecasted -0.71. The company’s revenue also exceeded expectations, reaching $4.9 billion compared to the anticipated $4.85 billion. Jefferies and Citi both raised their price targets for Cleveland-Cliffs to $11.00, citing the company’s stronger-than-expected financial performance and improved operational efficiency. Jefferies highlighted Cleveland-Cliffs’ second-quarter EBITDA of $97 million, which outperformed consensus expectations of an EBITDA loss. Citi maintained a Neutral rating on the stock, projecting third-quarter EBITDA expectations at $200 million and noting potential improvements in EBITDA by 2026. The company continues to explore non-core asset sales to accelerate debt reduction, a strategy that both Jefferies and Citi acknowledged. Despite ongoing challenges such as facility shutdowns and macroeconomic pressures, Cleveland-Cliffs is focusing on cost reduction and operational efficiency. The company also achieved record shipments of 4.3 million tons, contributing to its improved financial outlook.
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