Cleveland-Cliffs and Steel Dynamics raised as Citi sees flat rolled steel prices rebounding
Citi analysts upgraded steel stocks Cleveland-Cliffs (NYSE:CLF) and Steel Dynamics (NASDAQ:STLD) to Buy from Neutral in a note Monday, stating that flat rolled steel prices are at a floor.
The CLF and STLD price targets were unchanged at $22 and $130, respectively.
«We upgrade CLF and STLD from Neutral to Buy on the view that US flat rolled prices will rebound into year-end and company valuations are relatively attractive,» said the analysts.
«Sheet prices are expected to catch a bit from seasonal restocking, potentially exacerbated when the UAW strikes are resolved, supported by maintenance outages and slowing imports,» they added.
The analysts noted that CLF trades at the lowest enterprise value since 2020, while STLD is relatively exposed to flat rolled prices compared to its EAF peers. STLD was downgraded by the firm earlier this year on the risk to fab earnings, but the analysts said it now appears mostly priced in.
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