Cleveland-Cliffs Breaks to New Highs on Earnings, More Upside?Written by Gabriel Osorio-Mazilli. Published 10/26/2025.
Key Points- Cleveland-Cliffs just gave investors another reason to stick by it, as a 24% rally after earnings shows why this steelmaker still has room to run.
- Institutions bought before the big swing, but management suggests this bull run is only getting started.
- With tariffs in place to support local steel demand and prices, analysts shoot for a big EPS swing.
One of the most overlooked corners of the U.S. economy—the basic materials sector—just reminded investors why it’s worth paying attention. Shares of Cleveland-Cliffs Inc. (NYSE: CLF) jumped more than 24% in a single day after the company reported earnings.
The stock had been beaten down before the rally, offering a strong risk-to-reward profile. Now that it has hit a new 52-week high, investors may wonder whether more upside remains. Looking at industry dynamics can help those still deciding.
The Republican party is falling apart (Ad)Something unusual is unfolding inside the Republican Party — from Marjorie Taylor Greene breaking ranks to Ted Cruz calling the White House a “mafia,” and even Trump’s approval rating slipping. But veteran analyst Porter Stansberry says this isn’t really about politics at all. It’s part of a much larger shift he calls The Final Displacement — a historic economic and social realignment already impacting millions of Americans. His new documentary explains what’s driving it and how to prepare before it accelerates further.
Watch The Final Displacement to see what’s really happening behind the scenes
Zooming out from Cleveland-Cliffs, there is a technical reason to expect further gains: the performance gap between the S&P 500 and the Materials Select Sector SPDR Fund (NYSEARCA: XLB) leaves room for materials companies to extend a bull run in the months ahead, especially if broader economic conditions remain supportive.
Breaking Down the Cleveland-Cliffs QuarterBears pointed to lower volumes and revenue: four million net tons generated $4.7 billion, down 4% from last year’s $4.9 billion. However, the composition of revenue is more important than the headline decline. The company is shifting its sales mix toward infrastructure and automotive projects, a change tied to recent tariff policy that helps explain the rally.
After tariffs on foreign-assembled vehicles and imported steel were implemented, many expected a sharp slowdown in domestic activity. Instead, the measures effectively redirected demand toward domestic producers, with buyers seeking out suppliers such as Cleveland-Cliffs to avoid tariff exposure.
Cleveland-Cliffs CEO Lourenco Goncalves noted in the earnings release that major original equipment manufacturers (OEMs) have locked in multi-year agreements naming the company as a primary supplier. Those contracts enhance pricing power and create a more predictable revenue stream going forward.
That shift has also strengthened the balance sheet: the company reported net liquidity of $3.1 billion for the quarter, positioning Cleveland-Cliffs to capitalize on an industry rebound. As operational strength becomes visible in results, the company is beginning to command a premium versus peers.
How Markets Feel About Cleveland-Cliffs NowHaving previously pushed the stock into bear-market territory, many investors have reconsidered their stance in light of recent momentum and the company’s outlook. Institutional investors appear to agree: State Street increased its stake in Cleveland-Cliffs by 20.2% in August 2025, bringing its position to $208.6 million as of the latest filing.
These institutional buyers aren’t alone. The market now values Cleveland-Cliffs at a price-to-book (P/B) ratio of about 1.2x, roughly a 41% premium to the steel industry’s average P/B of 0.84x. That premium has some investors warning the stock may be getting stretched.
Markets often pay premiums to companies that consistently outperform both their peers and the broader S&P 500—a pattern Cleveland-Cliffs has demonstrated in recent quarters.
Looking ahead, expectations for a meaningful rebound remain elevated. With multi-year supply agreements in place, rising demand from infrastructure and automotive customers, and policy tailwinds from tariffs, Cleveland-Cliffs is positioned to drive long-term revenue growth and margin expansion as it captures more of the domestic steel market. |
