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Steel Shares Fired Up as Cleveland-Cliffs Expects Strong Earnings

Cleveland-Cliffs estimates it will post adjusted Ebitda of $3.5 billion this year, compared with analysts' consensus of $2.9 billion. Steelmaker shares are up.
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Shares of major steel-related companies rose Wednesday after Cleveland-Cliffs  (CLF) - Get Cleveland-Cliffs Inc. Report forecast strong earnings for this year, a move that led B. Riley to raise its share-price target.

The iron-ore miner estimates it would garner adjusted earnings before interest, taxes, depreciation and amortization of $3.5 billion, compared with the Bloomberg analyst consensus of $2.9 billion.

Cleveland-Cliffs projected the U.S. price for hot rolled coil steel will average $975 a net ton for the rest of the year.

CLF shares recently traded at $19.88, up 15%; U.S. Steel  (X) - Get United States Steel Corporation Report at $27.33, up 6.6%; Nucor  (NUE) - Get Nucor Corporation Report at $81.45, up 1.3%; ArcelorMittal  (MT) - Get Arcelor Mittal NY Registry Shares NEW Report at $29.37, up 1.3%, and Schnitzer Steel  (SCHN) - Get Schnitzer Steel Industries Inc. Report at $42.83, up 2.5%

At B. Riley, analyst Lucas Pipes raised his price target to $21 from $20 for CLF and affirmed a buy rating. Pipes had forecast adjusted Ebitda of $2.8 billion and an HRC price of $800, Bloomberg reports.

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He said in a commentary that “the announcement serves as a timely reminder that Cliffs is ideally positioned to benefit from stronger domestic steel and metallics prices.”

Cleveland-Cliffs is scheduled to report its first-quarter results April 22.

Earlier this month CLF was upgraded to buy from hold at GLJ Research thanks to the company’s earnings potential and rising steel prices. The Cleveland company was given a $22.09 price target.

The investment firm expects the company to realize strong earnings in the first half, with momentum for hot-rolled-coil prices staying "abnormally strong" well into the summer months.

In January, CLF announced strong preliminary results for the fourth quarter. It said it anticipated revenue of $2.2 billion to $2.3 billion