Cleveland-Cliffs stock price forecast: JPMorgan sees a 35% upside

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Cleveland-Cliffs Inc stock (NYSE: CLF) is up more than 10% on Thursday after a JPMorgan analyst named the mining company his “top pick” in the steel space.

Cleveland-Cliffs stock could climb to $44

Michael Glick reiterated CLF at “outperform” this morning and raised his price target to $44 that represents another 35% upside from here. He expects Cleveland-Cliffs to benefit from the Ukraine war that could see steel prices go as high as $1,500 a ton this year. The JPMorgan analyst wrote:

Russia’s invasion a month ago nearly instantly set off a butterfly effect across the steel markets. If we don’t see a resumption in Black Sea exports in the coming quarters, which is our base case, it’s hard to see what’s going to supply that demand in North America that is set to grow.

Glick also likes the Ohio-based company because it continues to pay down its absolute debt.

Jim Lebenthal agrees with the bullish outlook

On CNBC’s “Halftime Report”, Cerity Partners’ Jim Lebenthal, who has CLF as the largest position on his portfolio, agreed with the bullish call and said:

CLF did $588 million of EBITDA in January. The analysts’ estimates for Q1 EBITDA is $1.30 billion. They did almost half of that estimate in January, when steel prices were depressed. Now post Ukraine, when prices are surging, they’ll blow these estimates out of the water.

In its fiscal fourth quarter, Cleveland-Cliffs more than doubled its revenue on a year-over-year basis to $5.30 billion.

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