Steelmaker Cleveland-Cliffs (CLF) - Get Report, a recent meme-stock favorite, on Tuesday raised its second-quarter and full-year guidance, based on its current contractual business and rising steel prices.
Cleveland-Cliffs forecast second-quarter adjusted earnings before interest, taxes, depreciation and amortization of $1.3 billion, up from April's guidance of $1.2 billion.
The company raised its full-year 2021 adjusted Ebitda outlook to $5 billion. In April, the company said it had increased the its guidance to about $4 billion, up from an earlier forecast of about $3.5 billion.
Cleveland-Cliffs is scheduled to report second-quarter results July 22.
"The full-year expectation is based on current contractual business and the conservative assumption that the US [hot-rolled coil steel] index price averages $1,175 per net ton for the remainder of the year," the company said in a statement.
Last week, Cleveland-Cliffs surged after being caught up in the meme-stock craze, which has roiled markets in recent months.
A forum on Reddit channel WallStreetBets claimed the company was being shorted and that it was undervalued at a time when steel prices were rising and wait times for big steel orders were long due to shortages.
The NYSE Arca Steel Index, which includes publicly traded companies in the steel sector, has risen about 36% year-to-date.
GLJ Research analyst Gordon Johnson raised his price target for Cleveland-Cliffs to $28.35 from $22.09, saying the current steel prices could boost the company's valuation.
In April, Cleveland-Cliffs swung to a first-quarter profit on a tenfold increase in revenue.
The company earned $41 million, or 7 cents a share, in the quarter, compared with a loss of $52 million, or 18 cents a share, in the year-earlier period. Revenue reached $4.05 billion from $359 million a year earlier.
Shares of the Cleveland company at last check were down 2.2% to $21.65. The stock touched a 52-week high $24.77 on June 10.