Cleveland-Cliffs Inc (NYSE:CLF) stock is 15% higher to trade at $14.09 this morning. The steelmaker reported adjusted third-quarter earnings of 28 cents per share on $5.6 billion in revenue, the former of which topped estimates. Improved pricing and sales volumes were the catalysts for the beat. The company also hiked its 2027 outlook.
CLF is headed for its best single-session gain since a post-earnings pop on October 20 of last year. The pop today snaps a five-day losing streak, and takes the stock above its year-to-date breakeven level.
There hasn't been a shift from analysts yet, but be on the lookout for one. Of the 14 brokerages in coverage, 11 maintain “hold” or “strong sell” ratings, and the consensus 12-month price target of $12.98 is only a 5% discount to today's perch.
Short interest has tapered off, yet the 78.52 million shares sold short account for 13.9% of CLF's total available float. At the stock's average pace of trading, it would take shorts four trading days to buy back their bearish bets.
Options traders are setting a ceiling. The weekly 10/30 15-strike put is the most popular contract today. Premium purchasing is an intriguing route, per the stock's Schaeffer's Volatility Scorecard (SVS) of 91 out of 100. In other words, the shares have consistently realized higher volatility than its options have priced in over the past 12 months.
