Cleveland-Cliffs Inc. – Analyzing CLF Earnings and Future Growth

CLF had a wild ride last year, seeing significant volatility. At this point I think the correction is over, and looking at CLF today, they are in a solid position, even with the recent earnings miss. We will look at recent performance, CLF’s earnings, it’s performance vs peers, financial growth, and analyst ratings. At the end I’ll summarize why I think CLF is in a solid position Earnings: A Brief Recap Here is a quick summary of their results: Cleveland-Cliffs press release (NYSE:CLF): Q4 Non-GAAP EPS of $1.78 misses by $0.25. Revenue of $5.35B (+136.7% Y/Y) misses by $300M Fourth-Quarter Consolidated Results Fourth-quarter 2021 consolidated revenues were $5.3 billion, compared to prior-year fourth-quarter consolidated revenues of $2.3 billion. For the fourth quarter of 2021, the Company generated net income of $899 million, or $1.69 per diluted share. This included $47 million of charges, or $0.09 per diluted share, from amortization of inventory step-up and acquisition-related expenses. This compares to net income of $74 million, or $0.14 per diluted share, recorded in the fourth-quarter of 2020, which included $44 million of charges, or $0.10 per diluted share, of acquisition-related costs and amortization of inventory step-up. Even though they missed earnings I don’t think this is a huge miss, and the pre-market price is reflecting that. CLF Price Performance Over a 52-week period, CLF traded at $26.51 (high) & $12.77 (low) per share. CLF is currently trading at 20.97 % below the highest recorded price. CLF has been volatile the last year, but I think we can see it break past it’s previous highs this year, with a strong 2022. Peer Performance Comparing the monthly, 3 month, and 6 month price change head to head against peers in the industry, we observe: CLF has a 30 day price change of -5.6 % vs -3.24%,90 day price change of -6.8 % vs 1.07 %,180 day price change of -18.5 % vs 15.21 % against peers. CLF has not performed well, when compared to it’s peers over the same period. This isn’t great, but I don’t thin it’s terrible, again looking at overall market conditions. CLF Analyst Consensus I believe that you shouldn’t blindly follow analyst expectations and ratings for stocks. Typically, they are incentivised to upgrade or downgrade stocks for a variety of reasons. With that said, I like to use it as a proxy The price target for CLF is currently set at $36.81 per share. I think this is a very reasonable price target for CLF, especially given CLF’s financial position. Here is the review of consensus ratings analysts have given for CLF. CLF has earned an overall rating of 5/5, a DCF valuation rating of 5/5, as well as a consensus return on equity of 5/5. Again, the fundamentals for CLF look strong, I think it’s just a bit of time before the market catches up and realizes the value of CLF

Cleveland-Cliffs Inc. – Analyzing CLF Earnings and Future Growth

Feb 11, 2022 - George Lucas

8:56 AM

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CLF had a wild ride last year, seeing significant volatility. At this point I think the correction is over, and looking at CLF today, they are in a solid position, even with the recent earnings miss.

We will look at recent performance, CLF's earnings, it's performance vs peers, financial growth, and analyst ratings. At the end I'll summarize why I think CLF is in a solid position

Earnings: A Brief Recap

Here is a quick summary of their results:

Cleveland-Cliffs press release (NYSE:CLF): Q4 Non-GAAP EPS of $1.78 misses by $0.25.

Revenue of $5.35B (+136.7% Y/Y) misses by $300M

Fourth-Quarter Consolidated Results

Fourth-quarter 2021 consolidated revenues were $5.3 billion, compared to prior-year fourth-quarter consolidated revenues of $2.3 billion.

For the fourth quarter of 2021, the Company generated net income of $899 million, or $1.69 per diluted share. This included $47 million of charges, or $0.09 per diluted share, from amortization of inventory step-up and acquisition-related expenses. This compares to net income of $74 million, or $0.14 per diluted share, recorded in the fourth-quarter of 2020, which included $44 million of charges, or $0.10 per diluted share, of acquisition-related costs and amortization of inventory step-up.

Even though they missed earnings I don't think this is a huge miss, and the pre-market price is reflecting that.

CLF Price Performance

Over a 52-week period, CLF traded at $26.51 (high) & $12.77 (low) per share. CLF is currently trading at 20.97 % below the highest recorded price. CLF has been volatile the last year, but I think we can see it break past it's previous highs this year, with a strong 2022.

Peer Performance

Comparing the monthly, 3 month, and 6 month price change head to head against peers in the industry, we observe: CLF has a 30 day price change of -5.6 % vs -3.24%,90 day price change of -6.8 % vs 1.07 %,180 day price change of -18.5 % vs 15.21 % against peers.

CLF has not performed well, when compared to it's peers over the same period. This isn't great, but I don't thin it's terrible, again looking at overall market conditions.

CLF Analyst Consensus

I believe that you shouldn't blindly follow analyst expectations and ratings for stocks. Typically, they are incentivised to upgrade or downgrade stocks for a variety of reasons. With that said, I like to use it as a proxy

The price target for CLF is currently set at $36.81 per share.

I think this is a very reasonable price target for CLF, especially given CLF's financial position.

Here is the review of consensus ratings analysts have given for CLF. CLF has earned an overall rating of 5/5, a DCF valuation rating of 5/5, as well as a consensus return on equity of 5/5.

Again, the fundamentals for CLF look strong, I think it's just a bit of time before the market catches up and realizes the value of CLF