Cleveland Cliffs (CLF) guided first-quarter and full-year EBITDA estimates ahead of Wall Street expectations late Tuesday. CLF stock jumped.
The steelmaker sees first-quarter adjusted EBITDA of approximately $500 million and Q2 EBITDA of approximately $1.2 billion. That’s above analyst estimates or $388 million in Q1 and $1.03 billion in Q2.
Cleveland Cliffs also sees full-year EBITDA of $3.5 billion, assuming hot rolled steel prices averages $975 per net ton for the remainder of the year. Analysts expect EBITDA of $2.87 billion.
The steelmaker plans to announce full Q1 results before the market opens on April 22.
Cleveland Cliffs became the largest flat-rolled steel producer in North America after acquisitions last year of ArcelorMittal USA and AK Steel, transforming from an iron ore miner.
The revamped company is poised to ride a resurgent car industry and overall manufacturing sector. President Biden’s $2 trillion infrastructure plan is likely to be bullish for steelmakers as the administration has big plans to fix 10,000 bridges and eliminate lead pipes in water supplies.
In Q4, 41% of Cleveland Cliffs’ $2.1 billion in steelmaking revenue came from the automotive market, 24%, of sales to other steel producers, 18% from the distributors and converters market, and 17% from the infrastructure and manufacturing market.
CLF Stock Chart Analysis
Shares jumped 16.5% to 20.08 on the stock market today. CLF stock has a complicated chart. MarketSmith pattern recognition shows an 18.87 buy point from a consolidation. But with deeper analysis, it’s forming a double-bottom base with an 18.06 entry point, as well as a 17.88 handle.
But Wednesday’s surge means CLF stock is already extended as the buy range maxes out at 19.81 for the consolidation, 18.96 for the double-bottom base, and 18.77 for the handle.
CLF stock has a 86 Composite Rating but a week 20 EPS Rating. The Composite Rating compiles scores on key fundamental and technical metrics: earnings and sales growth, profit margins, return on equity, and relative price performance. Investors should focus on stocks with a Composite Rating of 90 or higher.
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