Shares of Cleveland-Cliffs (NYSE:CLF) gained in after-hours trading after the company reported earnings for its third quarter of Fiscal Year 2023. Earnings per share came in at $0.52, which beat analysts’ consensus estimate of $0.43 per share. Sales decreased by 0.7% year-over-year, with revenue hitting $5.61 billion. This beat analysts’ expectations by $80 million.
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The company reported steel shipments totaling 4.1 million net tons, notably setting a record in the automotive sector. The firm posted an adjusted EBITDA of $614 million, coupled with a robust cash flow of $767 million and free cash flow of $605 million. In addition, it reduced its net debt to $3.4 billion.
On the strategic front, Cliffs remains aligned with its previously established cost reduction targets, forecasting a $15 per net ton reduction in steel unit costs from Q3 to Q4 of 2023 and anticipates further cost efficiencies into 2024.
The fourth quarter of 2023 is also expected to see substantial enhancements in free cash flow, primarily driven by working capital. Additionally, Cliffs has revised its capital expenditure projection for 2023, marking it down to $670 million from its earlier midpoint guidance of $700 million.
Is CLF Stock a Buy or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on CLF stock based on three Buys, two Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average CLF price target of $20.60 per share implies 43.35% upside potential.
