• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Industrials

Analysts See More Growth for Cliffs Natural Resources

Shares surge on news that the mining giant inked a long-term supply deal with its top customer for iron ore pellets.
By JAMES PASSERI May 31, 2016 | 03:10 PM EDT
Stocks quotes in this article: CLF, MT

Shares of Cliffs Natural Resources (CLF) rallied 38% in midday trading Tuesday to $4.37, following news the Cleveland-based mining giant inked a 10-year contract to supply iron ore to steelmaker ArcelorMittal (MT).

J.P. Morgan Securities, which upgraded CLF to Overweight from Neutral Tuesday, say Cliffs Natural shares are likely to climb as high as $7 by December, through a combination of rising steel prices and reduced uncertainty over Cliffs' ability to build much-needed partnerships.

The deal with ArcelorMittal, Cliffs' top iron-ore client whose shares also jumped more than 3% on the day, helps to remove uncertainty over whether Cliffs will be able to sustain a partnership in which two crucial contracts are set to expire in the next 12 months, the analysts said. (ArcelorMittal purchases represented 49% of Cliffs' 2015 U.S. iron-ore sales last year.)

"The location of Cliffs' iron ore mines around the Great Lakes is a major competitive advantage, and CLF remains the best and cheapest source of iron ore pellets for all the integrated steel mills (except U.S. Steel) in the U.S.," J.P. Morgan Securities analyst Michael Gambardella said in a Tuesday report, noting that U.S. steel has a major presence in the region and supplies its own iron ore pellets.

J.P. Morgan Securities also revised their 2016 earnings-per-share estimates for Cliffs Natural Resources to $0.80 from $0.52, and 2017 forecasts to $1.09 from $0.48.

Cliffs Natural Resources shares are down roughly 17% over the past 12 months, largely due to the waning market for U.S. steelmaking, which has been pressured by a decline in prices and what many producers have argued to be a flood of cheap Chinese imports.
But the industry has begun to show broad signs of recovery, following a steady rise in metal prices over the year and the March announcement that the Department of Commerce will impose a 266% tax on Chinese steel imports in an effort to facilitate a rebound in the U.S. market.
Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Employees of TheStreet are restricted from trading individual securities.

TAGS: Investing | U.S. Equity | Industrials

More from Industrials

LyondellBasell Could Hold Temporarily Before Renewed Declines

Bruce Kamich
Jun 27, 2022 2:22 PM EDT

Let's take a look.

If These Stocks Are Any Indication, Investors Are Betting Against a Soft Landing

Bob Byrne
Jun 23, 2022 8:30 AM EDT

The sharp downward price action in a number of materials producers suggests traders believe a recession is right around the corner.

If You're Tired of Taking a Haircut on Losing Stocks, Get Mohawk

Paul Price
Jun 23, 2022 7:00 AM EDT

Now you can own a world leader industrial company at a ground-floor entry price.

Atkore Makes an Upside Breakout and Pullback

Bruce Kamich
Jun 9, 2022 12:15 PM EDT

Let's check the charts and indicators.

Bearish Bets: 3 Sluggish Stocks You Should Consider Shorting This Week

Bob Lang
May 15, 2022 10:30 AM EDT

These recently downgraded names are displaying both quantitative and technical deterioration.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 07:59 PM EDT PAUL PRICE

    Very good quarterly numbers from Bassett Furniture (BSET)

    Bassett Furniture (BSET) blew right through analys...
  • 04:41 PM EDT PAUL PRICE

    First Half Results - Putrid Second Half Results - Likely to Be Much Better

    It's great that we're done with June. 2022 marked...
  • 04:51 PM EDT PAUL PRICE

    We Should Be in for Better Starting Soon

    Window dressing Thursday, the last day of the...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login