Cleveland-Cliffs Inc.


SKU: CLF Category:


This is our first report on major steel producer, Cleveland-Cliffs. The company started off 2022 with an outstanding set of results surpassing Wall Street expectations. The slight drawback was the management seeing relatively weak service centre demand in the past few months due to generally high inventory levels. Despite this unfavourable backdrop of declining HRC prices and weak service centre demand, the company still managed to produce an earnings beat. This was largely because of their fixed contract price increases that went into effect at the start of this calendar year 2022, which ultimately offset the backdrop of spot price weakness and led to higher overall average selling prices for Cleveland-Cliffs. The company is raising its anticipated average selling price by $220 per ton in order to provide more context for its updated favourable outlook for the rest of the year. Their 2022 financial outlook is very compelling, with strong margins, high levels of free cash flow, and equity value creation through a massive conversion of total enterprise value to market value via debt reduction, thanks to their domestically sourced raw material supply chain and heavy weighting toward fixed-price contracts. We initiate coverage on the company with a ‘Hold’ rating.

Our Report Structure:

⦁ Company Overview
⦁ Investment Thesis
⦁ Key Drivers
⦁ Historical Quarterly Statement Analysis – Income Statement & Cash Flows
⦁ Historical Quarterly Balance Sheet Analysis
⦁ Historical Annual Financial Statement Analysis
⦁ Analysis Of Key Financial Ratios
⦁ Financial Forecasts For 3 Years
⦁ Forecasting The Capital Structure & Net Debt
⦁ Discounted Cash Flow Valuation
⦁ Trading Multiples
⦁ Key Risks
⦁ Disclosures

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