Citi Reiterates Neutral Rating on Cleveland-Cliffs (CLF)

Citi analyst Alexander Hacking reiterated a Neutral rating and $22.00 price target on Cleveland-Cliffs (NYSE: CLF).

The analyst commented, "CLF reported 1Q24 adj. EBITDA of $414m, lower than Citi at $464m (vs consensus $434m). The main miss vs our model was shipments at 3.9mt vs Citi 4.1mt, which the company attributes to a buyer’s strike from service centers (with autos still strong). FCF was zero for the quarter – but the company increased net debt by ~$700m primary to buyback ~$600m of stock (~5% of float). To facilitate this, the net-debt framework is updated to <2.5 TTM EBITDA vs. absolute $3.0bn target previously. On our model, this equals $4.3bn at end-2Q24 vs current $3.6bn. The company has authorized another $1.5bn of buybacks (~11% of float). We are surprised the scale of the buybacks, having (incorrectly) assumed that B/S flexibility would be #1 priority until the M&A backdrop was fully resolved. We expect a Neutral reaction to results with the call centered on the 2Q outlook & B/S strategy."

For an analyst ratings summary and ratings history on Cleveland-Cliffs click here. For more ratings news on Cleveland-Cliffs click here.

Shares of Cleveland-Cliffs closed at $20.85 yesterday.

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