Research Alert: CFRA Reiterates Strong Buy Opinion On Shares Of Cleveland-cliffs Inc.

11:35 PM EST, 02/25/2021 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We increase our 12-month target price by $3 to $25, as we value CLF using an EV/EBITDA multiple of 7.2x on our '21 EBITDA estimate, a discount to CLF's 3-year average forward EV/EBITDA of 8.1x, but in line with peers. We raise our '21 EPS estimate by $0.07 to $3.18 and start '22's at $3.26. CLF posts Q4 adjusted EPS of $0.24 vs. $0.26, $0.03 below consensus; sales missed by 4.4%. The 15% decline in CLF's share price following the Q4 print is extremely irrational (in our view) and we suggest long-term investors take advantage of this buying opportunity. CLF is poised to generate significant free cash flow and we forecast rapid debt reduction over the next two years. Given the fixed-price annual contracts with automotive customers, CLF has yet to realize the significant increase in domestic steel prices. And sales of hot briquetted iron (HBI) to outside customers (starting in Q2 '21) should provide additional positive momentum to CLF's sales and earnings. CLF is trading at an implied FCF yield of nearly 20%.