Cleveland-Cliffs, IBD Stock Of The Day, Breaks Out On Strong Guidance

Cleveland-Cliffs

Cleveland-Cliffs

CLF


$2.87


16.65%


265%

IBD Stock Analysis

  • Cleveland-Cliffs stock is technically extended beyond buy range.
  • But the relative strength line hitting a new high is bullish.
  • Big breakouts also can lead to big gains.

Composite Rating

Industry Group Ranking

Emerging Pattern

Double Bottom

* Not real-time data. All data shown was captured at
12:23PM EDT on
03/31/2021.

Cleveland-Cliffs (CLF) is IBD Stock of the Day after guiding first-quarter and full-year EBITDA estimates ahead of Wall Street expectations late Tuesday. CLF stock flashed a buy signal Wednesday.




X



The steelmaker sees first-quarter adjusted EBITDA of approximately $500 million and Q2 EBITDA of approximately $1.2 billion. That’s above analyst estimates or $388 million in Q1 and $1.03 billion in Q2.

Cleveland-Cliffs also sees full-year EBITDA of $3.5 billion, assuming hot rolled steel prices averages $975 per net ton for the remainder of the year. Analysts expect EBITDA of $2.87 billion.

The steelmaker plans to announce full Q1 results before the market opens on April 22.

Cleveland-Cliffs became the largest flat-rolled steel producer in North America after acquisitions last year of ArcelorMittal USA and AK Steel, transforming from an iron ore miner.

The revamped company is poised to ride a resurgent car industry and overall manufacturing sector. President Biden’s $2 trillion infrastructure plan is likely to be bullish for steelmakers as the administration has big plans to fix 10,000 bridges and eliminate lead pipes in water supplies.

In Q4, 41% of Cleveland-Cliffs’ $2.1 billion in steelmaking revenue came from the automotive market, 24%, of sales to other steel producers, 18% from the distributors and converters market, and 17% from the infrastructure and manufacturing market.


IBD Live: A New Tool For Daily Stock Market Analysis


CLF Stock Chart Analysis

Shares jumped 16.65% to close at 20.11 on the stock market today, the highest finish since 2014. CLF stock has a complicated chart. MarketSmith pattern recognition shows an 18.87 buy point from a consolidation. But a deeper analysis reveals more appropriate buy points of 18.06 from a double-bottom base, as well as 17.88 from a handle.

Technically, Wednesday’s surge means CLF stock is already extended as the buy range maxes out at 18.96 for the double-bottom base, and 18.77 for the handle.

But CLF stock is still sending a buy signal as it broke short-term resistance near 18.77 while the relative strength line hit a new high. And historically, big breakouts often lead to big gains. A close below today’s low of 18.27 would be a sell point.

Still, more conservative investors could also wait for CLF stock to pull back to a more conventional buy range.

Among other top steel stocks, U.S. Steel (X) rose 2.1%, Steel Dynamics (STLD) fell 1%, Nucor Corp. (NUE) lost 0.15% and Ternium SA (TX) eased 1.2%.

Follow Gillian Rich on Twitter for investing news and more.

YOU MAY ALSO LIKE:

These Are The 5 Best Stocks To Buy And Watch Now

Best Growth Stocks To Buy And Watch

Why This IBD Tool Simplifies The Search For Top Stocks

See How To Reduce Risk, Increase Profits With Swing Trading

After Hours: Chip Giant Flashes Buy Signal After Nasdaq Takes Key Step