Cleveland-Cliffs: 2Q26 Model Update

Research evidence excerpt

Cleveland-Cliffs: 2Q26 Model Update

Bill Peterson AC North America Equity Research

(1-415) 315-6766 27 July 2026 J P M O R G A N

bill.peterson@jpmchase.com

Price Performance Summary Investment Thesis and Valuation

Investment Thesis

We rate shares of Cliffs Neutral with a $11/share Dec 2026 price

target. Our rating reflects our view that protectionism can

support a higher through-cyle price floor at profitable levels for

CLF’s core footprint, while management has taken steps to shut

loss-making assets. Driving a richer mix through the exit of the

Calvert slab agreement, along with recent auto share gains

secured with multi-year contracts should be a FY26 tailwind. We

also see FY27 tailwinds from non-auto fixed contract resets and

improved pricing in Canada, which can help accelerate debt

YTD 1m 3m 12m paydown. However, leverage remains elevated and capex

Abs -10.2% 12.9% 22.2% 9.4% should trend higher next year with the BH reline.

Rel -18.5% 12.1% 18.8% -7.1%

Valuation

Company Data

For valuation, we use a 2027E EV/EBITDA multiple based on

Shares O/S (mn) 571

52-week range ($) 16.70-7.73 our estimates to arrive at a firm value. We then adjust for balance

Market cap ($ mn) 6,806.07 sheet items, including minority interest and underfunded

Exchange rate 1.00 pension, and assume other balance sheet adjustments to help pay

Free float (%) 98.8%

3M ADV (mn) 19.75 down debt, arriving at an equity valuation and our Dec 2026

3M ADV ($ mn) 219.8 price target of $11/share. For Cliffs, we use a 6.5x 2027E EV/

Volatility (90 Day) 67 EBITDA multiple, which is a premium to its ~5.5x historical

Index S&P 500

BBG ANR (Buy | Hold | Sell) 1|12|2 average. We assign a premium given protectionism lending to

reflect higher through-cycle profitability amid 50% S232 tariffs,

Key Metrics (FYE Dec)