Yahoo Finance Cleveland-Cliffs Inc. Just Missed Earnings; Here's What Analysts Are Forecasting Now
It's been a mediocre week for Cleveland-Cliffs Inc. (NYSE:CLF) shareholders, with the stock dropping 12% to US$18.23 in the week since its latest first-quarter results. Revenues fell 2.5% short of expectations, at US$5.2b. Earnings correspondingly dipped, with Cleveland-Cliffs reporting a statutory loss of US$0.14 per share, whereas the analysts had previously modelled a profit in this period. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Check out our latest analysis for Cleveland-Cliffs
After the latest results, the consensus from Cleveland-Cliffs' nine analysts is for revenues of US$21.2b in 2024, which would reflect a small 3.3% decline in revenue compared to the last year of performance. Statutory earnings per share are forecast to plunge 39% to US$0.50 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$21.4b and earnings per share (EPS) of US$1.34 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the pretty serious reduction to new EPS forecasts.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$21.13, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Cleveland-Cliffs at US$25.00 per share, while the most bearish prices it at US$15.50. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 4.4% annualised decline to the end of 2024. That is a notable change from historical growth of 41% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.8% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Cleveland-Cliffs is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Cleveland-Cliffs' revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Cleveland-Cliffs going out to 2026, and you can see them free on our platform here..
Even so, be aware that Cleveland-Cliffs is showing 2 warning signs in our investment analysis , you should know about...
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
