- Cleveland-Cliffs (CLF -1.5%) is maintained with a Sell rating and $5.13 price target by Vertical Group analyst Gordon Johnson, who believes "excess" supply is ramping into a "late cycle" U.S. steel market.
- Johnson notes growth for sheet products in Q2 went negative at a 1.6% Y/Y pace vs. the trailing four quarter average of 5.1% Y/Y growth, and U.S. hot rolled coil spot prices have slumped 8.9% after peaking on July 12.
- Steel investors historically have reacted "rather negatively to late cycle irrational capacity ramps," Johnson cautions.
- On a more bullish note, Jefferies analyst Seth Rosenfeld reiterates a Buy rating and $14 price target on the shares, saying CLF's dividend restart marks a turning point from being a highly-indebted growth company to an "emerging cash cow" in the metals sector, and the company's potential for further dividend growth remains underappreciated.
- Now read: Alcoa (NYSE:AA) maintained with Buy ratings at BAML, Morgan Stanley (NYSE:MS) after upbeat Q3
Original article