TLDR
- Cleveland-Cliffs stock fell 16% to $12.31 Monday following Q4 revenue of $4.3 billion that missed Wall Street’s $4.6 billion forecast
- Annual 2025 EBITDA plummeted to just $37 million compared to $773 million in 2024, pressured by weak auto sector and Canadian markets
- Lack of concrete details on POSCO strategic partnership frustrated investors hoping for definitive announcement on equity investment
- Steel shipments expected to reach 16.8 million tons in 2026 versus 16.2 million tons shipped in 2025
- CEO anticipates POSCO agreement during first half of 2026 with improved operating environment supporting recovery
Cleveland-Cliffs experienced a brutal trading session Monday as shares cratered 16% to $12.31. The steel maker’s fourth-quarter results fell short of analyst expectations on the top line.
The company posted Q4 EBITDA loss of $21 million on revenue of $4.3 billion. Consensus estimates called for a $7 million loss with revenue of $4.6 billion. The nearly $300 million revenue gap drove selling pressure.
Steel shipments for the quarter came in at 3.8 million tons. That matched the prior year’s level, showing no volume growth despite improved pricing dynamics.
For the full year 2025, Cleveland-Cliffs generated EBITDA of only $37 million. That figure marked a steep decline from the $773 million earned in 2024.
CEO Lourenco Goncalves pointed to several factors behind the weak performance. Sluggish auto production hurt demand for steel products. A money-losing slab contract weighed on margins. Weak conditions in Canada further pressured results.
Partnership Timeline Remains Unclear
Beyond the financial miss, investors expressed frustration over limited information regarding the POSCO discussions. The potential deal with the Korean steel giant has been a key focus for the market.
Cleveland-Cliffs and POSCO have been exploring a strategic partnership. The arrangement could involve POSCO taking an equity stake in the American steel producer.
Goncalves confirmed POSCO is still conducting due diligence on the potential transaction. He stated the companies expect to reach an agreement sometime in the first half of 2026.
The lack of specifics disappointed many shareholders. GLJ Research analyst Gordon Johnson noted investors wanted concrete news but received only vague process updates instead.
On a positive note, adjusted earnings per share came in better than expected. The company reported a loss of $0.43 per share versus the consensus estimate of a $0.62 loss.
Management Projects Turnaround
Despite the challenging 2025 results, company leadership expressed confidence about 2026 prospects. Goncalves said the negative factors from last year have all shown improvement.
The trade environment has shifted in a more favorable direction. President Trump’s steel and aluminum tariffs have helped support domestic pricing power.
Benchmark steel prices currently trade around $975 per ton. That’s up from approximately $760 per ton one year ago, providing a tailwind for margins.
Cleveland-Cliffs projects steel shipments of 16.8 million tons for 2026. The forecast represents a 3% increase over 2025’s 16.2 million tons. Planned capital expenditures will hold steady at roughly $700 million.
Analysts are modeling 2026 EBITDA of $1.5 billion. If achieved, that would mark a dramatic improvement from 2025’s weak showing.
The consensus analyst rating sits at “Hold” with an average price target of $13.70. Three firms rate the stock a Buy, five recommend holding, and two advise selling.
Cleveland-Cliffs maintains liquidity of about $3.3 billion. The balance sheet shows a debt-to-equity ratio of 1.41.
Prior to Monday’s selloff, the stock had climbed 47% over the previous 12 months. Higher steel prices and tariff optimism drove that rally.
The company now carries a market capitalization of $6.09 billion with institutional ownership at roughly 68%.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
