Goldman Sachs reiterates Buy rating on Cleveland-Cliffs stock despite earnings miss

Goldman Sachs reiterated its Buy rating and $15.00 price target on Cleveland-Cliffs (NYSE:CLF) following the steelmaker’s weaker-than-expected fourth-quarter results, saying in a research note after the earnings release that the shares trade close to intrinsic value and still warrant conviction despite the miss. The reaffirmation comes as Cleveland-Cliffs reported lower revenue and negative adjusted EBITDA, prompting investor scrutiny, while the firm flagged a constructive outlook for 2026 as the rationale for maintaining its positive stance. The guidance and commentary arrived amid heightened market attention to the company’s leverage and strategic moves, including a memorandum of understanding with South Korea’s POSCO. Analysts and credit agencies have reacted with mixed ratings and downgrades since the results were disclosed. Cleveland-Cliffs posted an adjusted EBITDA loss of $21 million versus the FactSet consensus for a $17 million loss and revenue of $4.3 billion, underperforming the $4.6 billion consensus. Management attributed the shortfall to a lower shipment volume of 3.8 million net tons and a pricing decline of $39 per ton; the company also showed a negative EBITDA of $236 million over the trailing twelve months and a gross profit margin of -4.94%. Those metrics underscore a period of weakened profitability that contrasts with the stock’s recent price momentum, leaving investors to weigh operational softness against valuation and recovery prospects. Goldman Sachs and analyst Mike Harris highlighted several focal points for investors going forward: realized pricing trends for 2026, the pace and options for deleveraging if free cash flow proves slower to rebound, and potential value creation from the POSCO partnership. The firm noted Cleveland-Cliffs has outperformed the S&P 500 by roughly 10% year-to-date and by 7% in the five trading days preceding the earnings release, yet it warned the shares could lag the sector near-term because of the earnings miss. The company’s balance-sheet strain is evident in a debt-to-equity ratio of 1.47 and a dramatic rise in leverage after the Stelco acquisition, with debt-to-EBITDA jumping to 20.5x in fiscal 2024 from 2.3x the prior year. Market reactions have been mixed: several analysts have trimmed estimates—five have reduced earnings forecasts with fiscal 2025 EPS projected at -$1.96—while Seaport Global Securities and KeyBanc lowered ratings citing valuation and estimate pressure. Conversely, Morgan Stanley upgraded to Overweight following the POSCO MOU, which some see as strategically transformative. Credit rating agency S&P Global downgraded Cleveland-Cliffs to B+ from BB- on high indebtedness. Separately, the company named Edilson Camara to its board, adding governance experience as it navigates operational recovery and balance-sheet repair.