Cleveland-Cliffs (CLF – Research Report), the Basic Materials sector company, was revisited by a Wall Street analyst today. Analyst Carlos De Alba from Morgan Stanley maintained a Hold rating on the stock and has a $7.50 price target.
Carlos De Alba has given his Hold rating due to a combination of factors impacting Cleveland-Cliffs. The decision to idle three steelmaking facilities highlights the company’s strategy to conserve cash and stabilize its financial position amidst weak steel demand and pricing pressures. This move is seen as a necessary measure to manage the company’s balance sheet, which is currently under strain with a high net debt to EBITDA ratio.
Additionally, the broader economic outlook contributes to the Hold rating. With anticipated slower growth in the US economy and revised bearish forecasts for steel prices, the demand for steel is expected to decline. These macroeconomic uncertainties, coupled with the company’s operational adjustments, suggest a cautious approach, justifying the Hold recommendation.
Based on the recent corporate insider activity of 40 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of CLF in relation to earlier this year.