To The Moon

$cleveland-cliffs(CLF)$

Steel has always been more than just an industrial commodity — it’s a symbol of national strength and economic vitality. This year, Cleveland-Cliffs Inc. (NYSE: CLF), one of America’s leading steel producers, is proving just how powerful that symbolism can be for investors.

Thanks to a fresh round of U.S. tariffs on imported steel, an aggressive domestic manufacturing agenda, and growing bipartisan support for reshoring critical industries, Cleveland-Cliffs has seen its stock surge in 2025. But as the company rides the “Made in America” wave, investors are asking a familiar question: Are we seeing the beginning of a sustainable rally or just a short-lived trade-driven pop?

In this analysis, we explore how tariffs and policy have fueled Cleveland-Cliffs’ momentum, assess the fundamentals and risks facing the company, and offer an informed perspective on whether CLF remains a compelling buy at these elevated levels.

Cleveland-Cliffs: A Brief Overview

Founded in 1847, Cleveland-Cliffs is one of the oldest continually operating iron and steel producers in North America. Today, it is a vertically integrated steelmaker, controlling production from its iron ore mines in Minnesota and Michigan to its steel mills and downstream processing plants.

Through a series of strategic acquisitions over the past decade — including AK Steel and ArcelorMittal USA — Cleveland-Cliffs transformed itself from a pure iron ore supplier into the largest flat-rolled steel producer in North America. Its product portfolio includes hot-rolled, cold-rolled, and coated steel used in automotive manufacturing, construction, appliances, and energy.

The company has also emerged as a key supplier of electrical steels for the EV and renewable energy industries — a segment expected to grow rapidly over the next decade.

The Catalyst: U.S. Tariffs on Foreign Steel

The most immediate catalyst for Cleveland-Cliffs’ stock jump has been the Biden administration’s decision in June 2025 to impose additional tariffs of up to 25% on imported steel from China, South Korea, and certain European producers. This policy, framed as both a national security and economic competitiveness measure, aims to protect U.S. steelmakers from what officials call “predatory dumping” practices by foreign competitors.

For Cleveland-Cliffs, which produces all of its steel domestically and sells almost exclusively to U.S.-based customers, the tariffs effectively shield it from lower-priced imports and enable it to maintain — or even raise — its selling prices without losing market share.

In the immediate aftermath of the announcement, CLF shares jumped nearly 18% over two weeks, outperforming both the S&P 500 and peers like U.S. Steel.

Riding the “Made in America” Narrative

Beyond tariffs, Cleveland-Cliffs has also benefited from the broader policy emphasis on “Made in America.”

Infrastructure and Manufacturing Tailwinds

The $1.2 trillion infrastructure package passed in late 2024 is beginning to translate into real demand for U.S. steel. Projects to repair bridges, modernize transit systems, and build renewable energy installations all require significant quantities of domestically produced steel.

At the same time, federal incentives to bring semiconductor, battery, and EV production back to U.S. soil are driving new investment in domestic manufacturing facilities — all of which need steel.

CEO Lourenco Goncalves has positioned the company squarely in the center of this movement, often emphasizing Cleveland-Cliffs’ role as the only American steelmaker capable of producing the specialized steels required for EV motors and transformers.

Recent Financial Performance

Cleveland-Cliffs’ most recent earnings report underscores its strong position. For Q2 2025, the company reported:

• Revenue of $6.4 billion, up 9% year-over-year.

• Adjusted EBITDA of $1.1 billion, compared to $950 million in the same quarter of 2024.

• Net income of $590 million, or $1.12 per diluted share.

• Free cash flow of over $400 million, used to reduce debt and repurchase shares.

Management also raised full-year guidance, projecting EBITDA in the range of $4.4–4.6 billion for 2025, citing higher average selling prices and steady automotive demand.

Strengths Supporting the Rally

Several factors strengthen the investment case for Cleveland-Cliffs, even at current prices.

Vertical Integration Advantage

By controlling its own iron ore supply, Cleveland-Cliffs is better insulated from raw material cost volatility than many competitors. Its upstream mines provide a stable feedstock at predictable costs, supporting margin stability even in choppier markets.

Automotive Exposure

The company generates roughly 40% of its revenue from supplying steel to automakers, a segment enjoying healthy demand amid the ongoing EV transition. Automotive OEMs are locked into long-term contracts, which also lend earnings visibility.

Balance Sheet Improvements

Over the past two years, Cleveland-Cliffs has paid down over $2 billion in debt, reducing its leverage ratio below 2x EBITDA — a marked improvement from its highly indebted position in the mid-2010s.

Risks to Consider

Still, there are important risks that investors should not ignore.

Cyclicality of Steel Prices

Steel remains a cyclical commodity business, subject to global economic trends. A slowdown in U.S. construction or manufacturing activity — particularly if recession fears materialize — could dampen demand and prices.

Tariff Uncertainty

While current tariffs are favorable to Cleveland-Cliffs, trade policy is inherently political and can change quickly with shifts in administration or international trade agreements. Any easing of tariffs could undercut the company’s pricing power.

Capital Intensity

Steelmaking is a capital-intensive industry. Maintaining modern facilities and meeting increasingly stringent environmental regulations require substantial ongoing investment.

Valuation: Still Attractive?

Cleveland-Cliffs currently trades at approximately 7x forward earnings and 4.5x EV/EBITDA — modest by historical standards and below many global peers. The company also trades at a free cash flow yield of roughly 10%, suggesting it remains undervalued relative to its cash-generating capacity.

Analysts’ price targets generally range between $24 and $28, implying upside of about 15–25% from current levels, though some caution that much of the tariff-related upside may already be priced in.

Analyst and Market Sentiment

Wall Street sentiment on Cleveland-Cliffs is mixed but leans positive. Of the 12 analysts covering the stock, 5 rate it a Buy, 6 a Hold, and 1 a Sell. Recent upgrades cite the company’s strong leverage to domestic manufacturing and the tailwind from tariffs.

Large institutional investors have also been adding to positions, with several pension funds and value-oriented managers increasing their stakes over the past quarter.

Strategic Outlook

Looking ahead, management is focused on three key strategic priorities:

1. Continue deleveraging and strengthening the balance sheet.

2. Expand production of high-value, specialized steels for EVs and renewable energy markets.

3. Invest in cleaner steelmaking technologies to meet environmental commitments and appeal to sustainability-conscious customers.

If executed effectively, these initiatives could enable Cleveland-Cliffs to maintain healthy margins even in the face of global competitive pressures.

Verdict: Buy, Hold, or Sell?

So, is Cleveland-Cliffs a stock to buy into strength, hold at current levels, or take profits?

For long-term investors who believe in the durability of the “Made in America” movement and domestic manufacturing renaissance, Cleveland-Cliffs still offers a compelling value proposition. The company is well-positioned to benefit from favorable policy, steady automotive demand, and its own operational improvements.

For more short-term, risk-averse investors, however, some caution may be warranted, as the stock has already priced in much of the immediate tariff-driven benefit and remains vulnerable to economic slowdowns.

In summary: Cleveland-Cliffs appears to be a solid hold with potential for further upside, particularly for those with a longer investment horizon and tolerance for cyclical swings. Opportunistic buying on pullbacks could also be prudent.

Key Takeaways

1. Tariffs and Policy Tailwinds: U.S. steel tariffs and infrastructure spending have provided a strong boost to Cleveland-Cliffs’ pricing power and demand.

2. Made in America Momentum: The company is well-aligned with reshoring trends and EV-driven manufacturing growth.

3. Financial Strength: Improved margins, debt reduction, and robust free cash flow underpin its investment case.

4. Cyclicality and Risk: Steel remains a cyclical business; policy reversals or economic weakness could reverse some of the gains.

5. Investor Action: Long-term investors may consider holding or selectively adding on weakness, while short-term traders should be mindful of potential near-term volatility.

Cleveland-Cliffs, a storied American steelmaker, seems poised to remain at the forefront of the nation’s manufacturing revival — offering both opportunity and risk to investors who believe in the resurgence of American industry.

Disclaimer: I want to make it clear that I am not a financial advisor, and nothing I say is intended to be a recommendation to buy or sell any financial instrument. Additionally, it's important to remember that there are no guarantees or certainties in trading or investing, and you should never invest money that you can't afford to lose.

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