Cleveland-Cliffs (NYSE:CLF) Shares Gap Down Following Weak Earnings

Key Points

• Cleveland-Cliffs shares gapped down to $8.94 from a $9.94 close after reporting quarterly EPS of ($0.40) — missing estimates of ($0.37) — despite revenue of $4.92B vs. consensus $4.84B; trading volume was about 4.9M shares.
• Analysts have largely moved to a Hold stance, with several firms cutting price targets (JPMorgan to $10, Wells Fargo to $9) and an average analyst target of $12.69.
• Insider activity was mixed: COO Clifford T. Smith sold 200,000 shares for roughly $2.09M while director Edilson Camara bought 19,700 shares; corporate insiders own about 0.95% of the stock.

Cleveland-Cliffs Inc. (NYSE:CLF - Get Free Report)'s stock price gapped down before the market opened on Monday following a weaker than expected earnings announcement. The stock had previously closed at $9.94, but opened at $8.94. Cleveland-Cliffs shares last traded at $9.3720, with a volume of 4,916,283 shares.

The mining company reported ($0.40) earnings per share for the quarter, missing analysts' consensus estimates of ($0.37) by ($0.03). The firm had revenue of $4.92 billion for the quarter, compared to the consensus estimate of $4.84 billion. Cleveland-Cliffs had a negative return on equity of 18.94% and a negative net margin of 7.91%.Cleveland-Cliffs's revenue for the quarter was up 6.3% on a year-over-year basis. During the same quarter last year, the business posted ($0.92) EPS.

Wall Street Analyst Weigh In

A number of equities research analysts have recently weighed in on CLF shares. Argus upgraded shares of Cleveland-Cliffs to a "hold" rating in a research report on Monday, April 6th. JPMorgan Chase & Co. dropped their price target on shares of Cleveland-Cliffs from $13.00 to $10.00 and set a "neutral" rating for the company in a research report on Tuesday, April 14th. KeyCorp started coverage on shares of Cleveland-Cliffs in a research report on Wednesday, March 25th. They issued a "sector weight" rating for the company. Wall Street Zen upgraded shares of Cleveland-Cliffs from a "sell" rating to a "hold" rating in a research report on Saturday, February 14th. Finally, Wells Fargo & Company dropped their price target on shares of Cleveland-Cliffs from $12.00 to $9.00 and set an "equal weight" rating for the company in a research report on Thursday, March 19th. Two research analysts have rated the stock with a Buy rating, seven have assigned a Hold rating and two have given a Sell rating to the company's stock. Based on data from MarketBeat, Cleveland-Cliffs presently has an average rating of "Hold" and an average target price of $12.69.

Insider Activity

In other news, COO Clifford T. Smith sold 200,000 shares of the business's stock in a transaction that occurred on Tuesday, February 17th. The shares were sold at an average price of $10.46, for a total value of $2,092,000.00. Following the completion of the transaction, the chief operating officer directly owned 560,529 shares in the company, valued at approximately $5,863,133.34. The trade was a 26.30% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, Director Edilson Camara bought 19,700 shares of the company's stock in a transaction dated Friday, February 13th. The stock was purchased at an average price of $10.13 per share, with a total value of $199,561.00. Following the completion of the transaction, the director directly owned 41,983 shares in the company, valued at approximately $425,287.79. This represents a 88.41% increase in their position. Additional details regarding this purchase are available in the official SEC disclosure. Corporate insiders own 0.95% of the company's stock.

Hedge Funds Weigh In On Cleveland-Cliffs

Hedge funds and other institutional investors have recently made changes to their positions in the company. Strengthening Families & Communities LLC raised its stake in Cleveland-Cliffs by 4,315.6% during the third quarter. Strengthening Families & Communities LLC now owns 1,987 shares of the mining company's stock worth $25,000 after acquiring an additional 1,942 shares in the last quarter. Los Angeles Capital Management LLC acquired a new position in Cleveland-Cliffs during the fourth quarter worth about $25,000. IFP Advisors Inc raised its stake in Cleveland-Cliffs by 117.5% during the fourth quarter. IFP Advisors Inc now owns 2,221 shares of the mining company's stock worth $29,000 after acquiring an additional 1,200 shares in the last quarter. CIBC Private Wealth Group LLC raised its stake in Cleveland-Cliffs by 306.1% during the fourth quarter. CIBC Private Wealth Group LLC now owns 2,461 shares of the mining company's stock worth $33,000 after acquiring an additional 1,855 shares in the last quarter. Finally, Caitong International Asset Management Co. Ltd raised its stake in Cleveland-Cliffs by 94.0% during the fourth quarter. Caitong International Asset Management Co. Ltd now owns 2,505 shares of the mining company's stock worth $33,000 after acquiring an additional 1,214 shares in the last quarter. 67.68% of the stock is currently owned by institutional investors and hedge funds.

Cleveland-Cliffs Stock Performance

The company has a quick ratio of 0.50, a current ratio of 1.95 and a debt-to-equity ratio of 1.15. The stock has a market cap of $5.45 billion, a price-to-earnings ratio of -3.27 and a beta of 1.91. The company has a 50 day simple moving average of $9.61 and a 200 day simple moving average of $11.80.

About Cleveland-Cliffs

Cleveland-Cliffs Inc is a leading North American producer of iron ore pellets and flat-rolled steel products. Tracing its roots to 1847, the company has evolved from an iron-ore mining concern in the Great Lakes region into a fully integrated steelmaker. Today, Cleveland-Cliffs operates iron ore mining complexes in Michigan and Minnesota as well as steelmaking and finishing facilities across the United States.

The company's integrated platform begins with direct control of key raw materials, including iron ore and scrap, and extends through every stage of steel production.

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