While steelmaker Cleveland-Cliffs (NYSE:CLF) didn’t win out in its pursuit of U.S. Steel (NYSE:X), investors can take some comfort in the fact that Cleveland-Cliffs was pretty good by itself. In fact, it’s up nearly 2% in Friday afternoon’s trading following some new analyst praise. The word came from J.P. Morgan via analyst Bill Peterson, who noted that Cleveland-Cliffs’ 2024 was looking about as bright as steel fresh out of the forge.
Peterson looked for Cleveland-Cliffs to pull in “ample cash” in 2024, thanks in large part to “…easing cost pressure and minimal capex requirements,” which should allow Cleveland-Cliffs to better focus on bringing value back to shareholders. Further, Peterson also pointed out that the auto industry is out of the woods as far as strikes go, and inventory levels need to be brought back up to snuff, which means more steel is about to roll off the lines.
Cleveland-Cliffs Does Have Some Problems
While Peterson’s assessment looks like an absolute winner for Cleveland-Cliffs, there are some issues to overcome. For instance, a planned tin plant in Weirton, Ohio, might not get built thanks to the International Trade Commission. A decision slated to be released on February 6 might result in the plant never getting constructed, as it will determine if the federal government will step in to ensure domestic tin plants can compete with foreign markets.
Further, in Indiana, residents are demanding action against Cleveland-Cliffs over pollution and emissions. Currently, reports note that soot can be so thick it can be mistaken for snow in the summer, and residents can write with the soot on their cars.
Is Cleveland-Cliffs Stock a Buy or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on CLF stock based on one Buy, one Hold, and one Sell assigned in the past three months, as indicated by the graphic below. After an 11.09% loss in its share price over the past year, the average CLF price target of $17.48 per share implies 5.59% downside risk.
