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The shares took a hit from an analyst's downgrade.
That pundit was once a bull, now he considers the steelmaker's equity to be only a hold.
One market professional tracking the fortunes of Cleveland-Cliffs (NYSE: CLF) became notably less enthusiastic about its future on Wednesday. As a result, shares of the storied American steelmaker fell by more than 9% in value during that trading session.
Analyst Philip Gibbs of KeyBanc set the tone for Cleveland-Cliffs stock well before market open, when he downgraded it to sector weight (read: hold) from his preceding overweight (buy). The pundit noted that the company had surpassed his $13 per share price target.
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Image source: Getty Images.
In his update to his Cleveland-Cliffs view, according to reports, Gibbs cited other concerns he had about the company. He wrote that business-boosting catalysts -- such as a rise in activity from auto industry customers -- seem to be fading. Costs, meanwhile, are landing slightly higher than previously anticipated.
Gibbs isn't giving up hope on Cleveland-Cliffs, as he wrote that the company still has several factors in its favor. He particularly singled out its strategic cooperation with top Korean steelmaker POSCO as an arrangement that could be favorable to its operations and finances.
Although Cleveland-Cliffs remains one of the country's top steel producers, I wouldn't consider it a compelling investment. I can't imagine any potential surges in demand for any reason, even with the Trump administration's efforts to bolster domestic manufacturing. Meanwhile, it remains a relentlessly U.S.-focused manufacturer and not a global player.
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