Cleveland-Cliffs (CLF) Up 11.1% Since Last Earnings Report: Can It Continue?

It has been about a month since the last earnings report for Cleveland-Cliffs (CLF). Shares have added about 11.1% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Cleveland-Cliffs due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers. Cleveland-Cliffs' Q3 Earnings and Revenues Miss EstimatesCleveland-Cliffs’ third-quarter 2024 adjusted loss was 33 cents per share. This compares unfavorably with adjusted earnings of 54 cents in the prior-year quarter. Loss per share was wider than the Zacks Consensus Estimate of a loss of 31 cents.Revenues fell 18.5% to $4,569 million in the quarter from the year-ago quarter. The top line missed the Zacks Consensus Estimate of $4,754.4 million.Operational HighlightsThe company reported Steelmaking revenues of $4,419 million for the third quarter, down around 18.8% year over year. The average net selling price per net ton of steel products was $1,045 in the quarter, down around 13.1% year over year. It missed our estimate of $1,048. External sales volumes for steel products were roughly 3.8 million net tons, down around 7.3% year over year. It lagged our estimate of 4 million net tons.Financial PositionCleveland-Cliffs ended the third quarter with cash and cash equivalents of $39 million, up around 25.8% year over year. Long-term debt increased 9.1% year over year to $3,774 million.Net cash used in operating activities was $84 million in third-quarter 2024.OutlookCleveland-Cliffs said it has set a much lower capital budget for 2025, even after accounting for strategic projects that are expected to increase annual EBITDA by more than $600 million once finished. Furthermore, decreasing coal costs will result in a $70 million benefit next year versus 2024. Steel demand is expected to rebound in early 2025 owing to a combination of economic and political factors. Stelco's assets and cost reductions position Cleveland-Cliffs well to benefit from this recovery, allowing it to quickly repay acquisition debt while maintaining healthy free cash flow.Cliffs reduced its full-year 2024 capital expenditures target by $50 million to $600-$650 million from $650-$700 million expected earlier. Cliffs also forecast standalone (excluding Stelco) full-year 2025 capital expenditures of around $600 million, which includes strategic expansion projects in Middletown, Butler and Weirton. Stelco's sustained capital expenditure is estimated to be around $100 million per year.How Have Estimates Been Moving Since Then?It turns out, estimates review have trended downward during the past month.The consensus estimate has shifted -31.64% due to these changes.VGM ScoresCurrently, Cleveland-Cliffs has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Cleveland-Cliffs has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.Performance of an Industry PlayerCleveland-Cliffs is part of the Zacks Mining - Miscellaneous industry. Over the past month, Reliance (RS), a stock from the same industry, has gained 8.8%. The company reported its results for the quarter ended September 2024 more than a month ago.Reliance reported revenues of $3.42 billion in the last reported quarter, representing a year-over-year change of -5.6%. EPS of $3.64 for the same period compares with $5 a year ago.For the current quarter, Reliance is expected to post earnings of $2.80 per share, indicating a change of -40.8% from the year-ago quarter. The Zacks Consensus Estimate has changed -1.5% over the last 30 days.The overall direction and magnitude of estimate revisions translate into a Zacks Rank #5 (Strong Sell) for Reliance. Also, the stock has a VGM Score of B.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cleveland-Cliffs Inc. (CLF): Free Stock Analysis Report Reliance, Inc. (RS): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks