JPMorgan downgrades Cleveland-Cliffs, lowers price target

JPMorgan has downgraded Cleveland-Cliffs (CLF) stock, revising its rating to Neutral from Overweight and lowering its price target to $17 from $23. This bearish sentiment is driven by concerns about declining steel prices and escalating spending within the company.

Yahoo Finance's Julie Hyman and Josh Lipton break down the details.

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This post was written by Angel Smith

Video Transcript

All right, let's get to some calls the day.

Now, JP Morgan downgrading Cleveland Cliffs from overweight to neutral.

It also lowered the price target from 23 to 17.

Main reasons for the downgrade.

They say lower steel prices and higher spending.

You see the stock down about 3.5% in today's trade.

So they were, that was really it ju they were talking to their clients about listen, rising cap X needs.

They called out, they see auto inventories are now replenished no near term growth projects.

They said the balance sheet does look cleaned up.

They like this greater focus.

I I guess shareholder returns, but they think most investors in their opinion would prefer cash accumulation for maybe some potential M and A rather than they say debt funded buybacks.

See, yeah, I mean, they, they don't seem to be, I mean, they're just neutral so they don't seem to be too negative.

A lot of the calls does seem to be besides what you're talking about, about how they're using their cash seems to be more macro effects among the pricing pressures that you talked about is also that ev demand is just not fantastic.

And so that's something that has been a head wind or at least a lack of a tailwind for demand and a lack of a support for pricing.

So that's pretty much what's going on there.

$17 is the price target.

They're, they're now putting on Cleveland Cliffs sentiment.

I mean, just fairly negative on this one.

Stocks now got hit down more than 25% this year.

And even then, I mean, most analysts still on the sidelines.