Feb 11, 2022 - George Lucas
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
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.
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.
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.
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