Key Takeaways
- Wells Fargo elevated Cleveland-Cliffs from Equal Weight to Overweight, pushing the price objective from $12 to $14.
- Shares of CLF advanced roughly 1% to approximately $12.30 during Tuesday’s session.
- Wells Fargo’s Timna Tanners anticipates EBITDA in late 2026 and 2027 will surpass current Street projections.
- Hot rolled coil prices have surged from around $900 to $1,300 per ton in 2026.
- Just 25% of Wall Street analysts currently maintain Buy ratings on CLF, significantly trailing the S&P 500 norm of 55-60%.
Shares of Cleveland-Cliffs advanced approximately 1% to reach $12.30 on Tuesday following a ratings boost from Wells Fargo. The bank’s analyst Timna Tanners elevated her stance to Overweight from Equal Weight while simultaneously increasing her price objective to $14 from the previous $12 mark.
Tanners’ thesis centers on the belief that the steelmaker’s financial performance could “materially exceed” prevailing analyst estimates. She specifically highlights the latter half of 2026 and the full 2027 calendar year as timeframes when this earnings outperformance may materialize.
Current Street consensus projects approximately $1.3 billion in aggregate EBITDA for the second and third quarters of this year. Looking ahead to 2027, analyst forecasts converge around $2.3 billion.
To put these figures in perspective, Cleveland-Cliffs generated $5.3 billion in EBITDA during 2021, representing the company’s strongest annual performance. Steel pricing during that period reached approximately $1,900 per ton at its zenith.
Hot Rolled Coil Pricing Momentum Builds
Benchmark steel pricing began 2026 at approximately $900 per ton. Since then, prices have climbed to roughly $1,300 per ton, expanding the company’s margin potential.
According to Wells Fargo’s research, hot rolled coil delivery lead times have stretched to levels not seen since the pandemic period. Purchasers are encountering significant challenges securing material within desired timeframes.
Domestic hot rolled coil pricing in the Houston market has surged approximately $235 per ton since geopolitical tensions involving Iran escalated. By contrast, Southeast Asian prices—frequently referenced as a global pricing indicator—have increased just $35 per ton during the identical period.
Tanners characterized this recommendation as a tactical positioning move rather than a strategic long-term investment. Her view suggests the steel pricing cycle may be approaching its peak, yet Cleveland-Cliffs has not fully realized the financial benefits from the current price environment.
New Capacity Plans Create Uncertainty
CLF shares dipped to $11 last week, representing a roughly 5% decline since President Trump publicly endorsed a major steel manufacturing project planned for Iowa.
Mesabi Metallics has outlined plans for a $15 billion fully integrated steel production complex in the state. Upon reaching full operational capacity, the facility could deliver eight to nine million tons of finished steel products annually.
This volume represents a meaningful portion of the domestic market, which currently generates 80 to 90 million tons per year while importing an additional 20 to 25 million tons. Fresh capacity of this magnitude could either displace existing import volumes or pressure current domestic manufacturers.
However, the facility remains several years from commercial operations. For the immediate term, Cliffs’ valuation hinges on near-term EBITDA generation rather than future competitive dynamics.
Currently, only 25% of analysts tracking Cliffs maintain Buy recommendations on the stock. This compares unfavorably to the typical S&P 500 constituent, where Buy ratings usually account for 55-60% of analyst coverage.
That said, sentiment is gradually improving. During the summer months, merely two analysts held Buy ratings on the shares. That figure has since doubled to four.
The consensus price target among covering analysts stands at approximately $13, up from roughly $12 twelve months ago.
Cleveland-Cliffs is scheduled to announce quarterly results in 13 days. The company’s most recent quarterly report showed revenue of $5.2 billion, aligning with analyst expectations, while posting a per-share loss of $0.20 that slightly exceeded the anticipated $0.19 loss.
Wells Fargo also noted that cost pressures emerged as the primary concern voiced by management teams during the previous quarter. The firm continues to favor aluminum equities and copper producer Freeport-McMoRan over steel stocks for longer-duration portfolio positioning.
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