Cleveland-Cliffs Cut to Equal-Weight as Target Rises to $12.50
CLF•Morgan Stanley cut Cleveland-Cliffs’ rating to Equal-weight from Overweight despite raising its price target to $12.50 from $12.00, noting the stock’s roughly 50% rally since early April. The firm forecasts U.S. hot-rolled coil prices averaging $1,112/ton in 2026, tapering to $900/ton by 2028.
1. Ratings Adjustment and Target Increase
The analysis lowered Cleveland-Cliffs’ rating to Equal-weight from Overweight while boosting the price target to $12.50 from $12.00, reflecting a more balanced risk-reward after the stock’s roughly 50% rally since early April.
2. Steel Price Forecasts and Outlook
Hot-rolled coil prices are projected to average $1,112 per ton in 2026, $1,012 in 2027 and $900 in 2028, with elevated levels expected through H2 2026 before moderating as new production and imports ease supply tightness.
3. Earnings and Valuation Implications
Higher near-term steel prices support robust earnings through 2026, but potential declines in 2027 and beyond could pressure margins and valuation as the sector moves past its cyclical peak.
4. Peer Comparison
Among North American steel producers, only Commercial Metals Company maintained an Overweight stance, while Nucor and Steel Dynamics retained Equal-weight ratings with raised price targets of $258 and $270, respectively, underscoring varying risk assessments.
