Back to top

Image: Bigstock

Cleveland-Cliffs (CLF) Moves 16.7% Higher: Will This Strength Last?

Read MoreHide Full Article

Cleveland-Cliffs (CLF - Free Report) shares ended the last trading session 16.7% higher at $20.11. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 17.4% gain over the past four weeks.

CLF’s rally is driven by its strong guidance for the first quarter and full-year 2021 that exceeded analyst expectations. The company sees first-quarter adjusted EBITDA of roughly $500 million. It also expects adjusted EBITDA of around $3.5 billion for the full year assuming that the U.S. hot-rolled coil steel prices average $975 per net ton for the balance of the year.

Price and Consensus

Price Consensus Chart for CLF

This mining company is expected to post quarterly earnings of $0.12 per share in its upcoming report, which represents a year-over-year change of +200%. Revenues are expected to be $3.77 billion, up 949.5% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Cleveland-Cliffs, the consensus EPS estimate for the quarter has been revised 78.8% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on CLF going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

ClevelandCliffs Inc. (CLF) - free report >>

Published in