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Shares of Cleveland-Cliffs Inc. (CLF) gained 4% in early trade on Friday after the company reported better-than-expected results for the third quarter of 2021 on robust revenue growth. The iron ore mining company supplies iron ore pellets to the North American steel industry from mines and pellet plants located in Michigan and Minnesota.
Third-quarter earnings stood at $2.33 per share, topping the Street estimates of $2.17 per share. The figure compares favorably with a loss of $0.02 per share reported in the same quarter last year. (See Cleveland-Cliffs stock charts on TipRanks)
Total revenue of $6 billion outpaced the consensus estimate of $5.7 billion. The company had reported revenue of $1.6 billion last year. The upside can be attributed to a significant increase in the volume of steel products.
Also, adjusted EBITDA stood at $1.9 billion, compared to $126 million in the third quarter of 2020. As of October 19, 2021, the company had total liquidity of nearly $2.2 billion. (See Insiders’ Hot Stocks on TipRanks)
The Chairman, President and CEO of Cleveland-Cliffs, Lourenco Goncalves, said, “We continue to focus on growing strong relationships and managing the balance sheet with a through-the-cycle perspective in order to generate sustainable long-term value.”
On October 18, Morgan Stanley analyst Carlos De Alba maintained a Hold rating on Cleveland-Cliffs and lowered the price target to $21 from $26. The new price target implies 0.76% downside potential.
The rest of the Street is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 2 Buys and 1 Hold. The average Cleveland-Cliffs price target of $27 implies 27.6% upside potential.
Investors should always be aware of the risks involved in any stock. According to the new TipRanks’ Risk Factors tool, CLF is at risk mainly from two factors: Production, and Finance and Corporate, which contribute 39% and 30%, respectively, to the total 33 risks identified for the stock. Under the Production risk category, Cleveland-Cliffs has 13 risks, details of which can be found on the TipRanks website.