Morgan Stanley Upgrades Cleveland-Cliffs (CLF) to Overweight

Morgan Stanley analyst Carlos De Alba upgraded Cleveland-Cliffs (NYSE: CLF) from Equalweight to Overweight with a price target of $17.00 (from $12.80).

The analyst comments "Upgrading Cleveland-Cliffs to OW on a potentially transformational opportunity via its announced MoU with POSCO. With a 50% steel tariff in place, soft demand, and steel prices already elevated, the near-term backdrop offers few obvious cyclical tailwinds in the North American steel industry. As a result, across the industry the equity setup today appears more balanced than skewed to the upside. However, Cleveland-Cliffs is especially well positioned, in our view, as the only domestic producer capable of true transformation via a potential win-win partnership with POSCO (covered by Young Suk Shin). We believe POSCO has a clear strategic incentive to deepen its presence in the U.S. market, where long-term growth prospects are superior to other geographies, trade protection is likely to persist, and incremental investment in manufacturing and non-residential construction remains supportive. A U.S. partnership would also strengthen POSCO’s competitive positioning versus its primary global rival, Nippon Steel (covered by Yu Shirakawa)."

For an analyst ratings summary and ratings history on Cleveland-Cliffs click here. For more ratings news on Cleveland-Cliffs click here.

Shares of Cleveland-Cliffs closed at $12.26 yesterday.

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