Cleveland-Cliffs' soaring outlook lifts steel stocks in early trade
Mar. 31, 2021 9:58 AM ETCleveland-Cliffs Inc. (CLF)By: Carl Surran, SA News Editor
Steel names open with strong gains after Cleveland-Cliffs (CLF +16.2%) provided guidance for Q1 and FY 2021 adjusted EBITDA that easily beat analyst estimates.
Cleveland-Cliffs said it foresees full-year adjusted EBITDA of ~$3.5B, well ahead of the $2.87B consensus, based on expectations for an average $975/ton U.S. hot-rolled coil steel price for the rest of the year.
Among other top steel stocks (NYSEARCA:SLX): X +6.5%, NUE +2.1%, MT +1.9%, STLD +1.3%.
The guidance "serves as a timely reminder that Cliffs is ideally positioned to benefit from stronger domestic steel and metallics prices," B Riley analyst Lucas Pipes says, also noting current U.S. domestic HRC prices are $1,343/ton, a lofty level that would not be reflected in Cliffs' earnings until late June.
Cleveland-Cliffs' transformation is "largely the result of the leadership of CEO Lourenco Goncalves, who stands in the first rank of today's CEOs," Larry Hall writes in a bullish analysis published recently on Seeking Alpha.