Taitai6769/iStock via Getty Images
Cleveland-Cliffs (NYSE:CLF) and US Steel (X) have been downgraded by Morgan Stanley from Overweight to Equal Weight with respective price targets of $20 and $51. The recent analysis suggests a modest 2.1% growth in steel demand for 2024, and with increasing capacity, it is expected that steel prices will decline.
Cleveland-Cliffs (CLF) is anticipated to display a robust free cash flow yield in the upcoming years, as suggested by Morgan Stanley analyst Carlos De Alba. This is due to the absence of major capital expenditure projects. Additionally, the company’s high percentage of fixed annual price contracts is projected to uphold overall realized pricing, despite the expected drop in spot steel prices in 2024.
De Alba pointed out that Cleveland-Cliffs (CLF) has the highest exposure to the automotive sector among his North American steel coverage. This sector, which exhibited a strong performance in 2023, is predicted to lag behind this year.
Although US Steel (X) shares will be boosted by Nippon Steel’s $55 per share bid, De Alba stated that he no longer sees significant upside following the completion of US Steel’s strategic review process, despite the promising nature of the company’s growth projects.
5 Stocks Our Experts Predict Could Double In the Next Year
By submitting your email, you'll also get a free pivot & flow membership. A free daily market overview. You can unsubscribe at any time.
