BofA Securities has lowered its objective for Cleveland-Cliffs (NYSE:CLF) to $13.00 from $14.50 and retained a Neutral rating following the company's reported fourth-quarter results, according to the firm's first-take note dated February 9, 2026. The stock was trading at $12.48, having declined almost 10% over the past week, a move that InvestingPro data said leaves the shares marginally overvalued versus the research service's Fair Value model.
The steel producer posted an adjusted EBITDA loss in Q4 2025 that came in below both BofA's internal projections and consensus expectations, with the research firm attributing the shortfall primarily to lower shipments. For the last twelve months, InvestingPro shows Cleveland-Cliffs recorded EBITDA of -$126 million and reported a negative gross profit margin of -4.62%, underscoring significant operational headwinds facing the business.
Management provided a 2026 outlook that calls for higher shipments and lower costs relative to 2025, but BofA observed that the scale of expected cost reductions was smaller than previously modeled. Additionally, the company’s Q1 2026 price and cost guidance arrived below BofA's prior assumptions. Analysts in the aggregate do not anticipate a return to profitability in 2026, with EPS consensus for fiscal 2026 at -$0.54.
Reflecting the revised view on near-term results, BofA trimmed its 2026 EBITDA estimate for Cleveland-Cliffs by roughly 25% while maintaining its valuation methodology: 8.0x/7.5x EV/EBITDA for 2026E/2027E and a 1.0x net asset value multiple. Street targets for the stock span from $8.90 to $16.80, offering a wide band of expectations among analysts.
One of the company’s most significant strategic items is the planned partnership with POSCO. BofA now expects that agreement to close in the first half of 2026 rather than in the first quarter as previously anticipated. The research note suggested the POSCO deal could materially improve Cleveland-Cliffs’ operating and financial trajectory if it completes, although the company presently carries what BofA described as a "relatively stretched balance sheet" compared with peers.
Balance-sheet metrics cited in InvestingPro data highlight the company’s leverage: total debt near $8 billion and a debt-to-equity ratio of 1.15, alongside a current ratio of 1.95. These figures signal notable indebtedness even as short-term liquidity appears adequate.
On an earnings-per-share basis, Cleveland-Cliffs reported an adjusted loss of $0.43 for Q4 2025, a smaller loss than the forecasted $0.56 per share. Revenue, however, missed expectations: the company reported $4.31 billion versus the anticipated $4.58 billion. The combination of a narrower-than-expected EPS loss and a revenue shortfall framed the company's quarter as mixed, with investor concern focused on the top-line miss and implications for margins and cash generation.
In sum, the convergence of a Q4 EBITDA miss, reduced near-term cost savings, a downward revision to 2026 EBITDA estimates, and a leveraged balance sheet underpin BofA’s decision to lower the target price while keeping Cleveland-Cliffs at Neutral. The pending POSCO partnership remains the primary potential catalyst to improve the outlook, contingent on closing in the first half of 2026.
Sectors affected:
- Steel and metals production
- Industrial manufacturing and end markets that consume steel
- Credit and leveraged-capital markets given the company's high debt load