Cleveland-cliffs Inc.

CLF

Metal Mining

Mkt Cap

$8.055B

PE

20.71

Debt

$3.719B

Cash

$30M

EV

$11.74B

FCF

$1.808B

Market Cap

$8.055B

P/E Ratio

20.71

Debt

$3.719B

Cash

$30M

EV

$11.74B

FCF

$1.808B

Charts data: {"Earnings":[{"time":"2014-12-30","value":-8311600000},{"time":"2015-12-30","value":-787700000},{"time":"2016-12-30","value":174100000},{"time":"2017-12-30","value":363100000},{"time":"2018-12-30","value":1128100000},{"time":"2019-12-30","value":292800000},{"time":"2020-12-30","value":-122000000},{"time":"2021-12-30","value":2988000000},{"time":"2022-12-30","value":1335000000},{"time":"2023-12-30","value":399000000}],"Sales":[{"time":"2014-12-30","value":4623700000},{"time":"2015-12-30","value":2013300000},{"time":"2016-12-30","value":2109000000},{"time":"2017-12-30","value":2330200000},{"time":"2018-12-30","value":2332400000},{"time":"2019-12-30","value":1989900000},{"time":"2020-12-30","value":5354000000},{"time":"2021-12-30","value":20444000000},{"time":"2022-12-30","value":22989000000},{"time":"2023-12-30","value":21996000000}],"Net Margins":[{"time":"2014-12-30","value":-1.79760797629604},{"time":"2015-12-30","value":-0.3912481994735012},{"time":"2016-12-30","value":0.08255097202465624},{"time":"2017-12-30","value":0.15582353446056132},{"time":"2018-12-30","value":0.4836648945292403},{"time":"2019-12-30","value":0.14714307251620684},{"time":"2020-12-30","value":-0.022786701531565184},{"time":"2021-12-30","value":0.14615535120328702},{"time":"2022-12-30","value":0.058071251468093436},{"time":"2023-12-30","value":0.018139661756683034}],"Assets":[{"time":"2014-12-30","value":3164000000},{"time":"2015-12-30","value":2135500000},{"time":"2016-12-30","value":1923900000},{"time":"2017-12-30","value":2953400000},{"time":"2018-12-30","value":3529600000},{"time":"2019-12-30","value":3503800000},{"time":"2020-12-30","value":16771000000},{"time":"2021-12-30","value":18975000000},{"time":"2022-12-30","value":18755000000},{"time":"2023-12-30","value":17537000000}],"Stockholders Equity":[{"time":"2014-12-30","value":-1431300000},{"time":"2015-12-30","value":-1811600000},{"time":"2016-12-30","value":-1330500000},{"time":"2017-12-30","value":-444100000},{"time":"2018-12-30","value":424200000},{"time":"2019-12-30","value":357900000},{"time":"2020-12-30","value":2341000000},{"time":"2021-12-30","value":5774000000},{"time":"2022-12-30","value":8042000000},{"time":"2023-12-30","value":8122000000}],"ROE":[{"time":"2014-12-30","value":5.807028575420946},{"time":"2015-12-30","value":0.43480900861117244},{"time":"2016-12-30","value":-0.1308530627583615},{"time":"2017-12-30","value":-0.8176086467011934},{"time":"2018-12-30","value":2.659358793022159},{"time":"2019-12-30","value":0.818105616093881},{"time":"2020-12-30","value":-0.05211448099102947},{"time":"2021-12-30","value":0.517492206442674},{"time":"2022-12-30","value":0.16600348172096493},{"time":"2023-12-30","value":0.049125831076089636}],"ROA":[{"time":"2014-12-30","value":-2.9852402022756004},{"time":"2015-12-30","value":0.07084991805197846},{"time":"2016-12-30","value":0.12516243047975467},{"time":"2017-12-30","value":0.1434279135911153},{"time":"2018-12-30","value":0.1907298277425204},{"time":"2019-12-30","value":0.1225241166733261},{"time":"2020-12-30","value":-0.008466996601276013},{"time":"2021-12-30","value":0.21143610013175232},{"time":"2022-12-30","value":0.10338576379632099},{"time":"2023-12-30","value":0.03860409420083252}]}

Cleveland-Cliffs Inc. operates as a flat-rolled steel producer in North America. The company offers hot-rolled, cold-rolled, electrogalvanized, hot-dip galvanized, galvannealed, aluminized, galvalume, enameling, and advanced high-strength steel products; stainless steel products; plates; and grain oriented and non-oriented electrical steel products. It also provides tubular components, including carbon steel, stainless steel, and electric resistance welded tubing. In addition, the company offers tinplate products, such as electrolytic tin coated and chrome coated sheet, and tin mill products; tooling and sampling; raw materials; ingots, rolled blooms, and cast blooms; and hot-briquetted iron products. Further, it owns five iron ore mines in Minnesota and Michigan. The company serves automotive, infrastructure and manufacturing, distributors and converters, and steel producers. Cleveland-Cliffs Inc. was formerly known as Cliffs Natural Resources Inc. and changed its name to Cleveland-Cliffs Inc. in August 2017. The company was founded in 1847 and is headquartered in Cleveland, Ohio.

Sector

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9/30/23
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12/31/18
10-Q
9/30/18
10-Q
6/30/18
10-Q
3/31/18
10-K
12/31/17

DCF

Discounted Cash Flow Valuation of Cleveland-cliffs Inc.

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$1.808B	$2.35B	$2.99B	$3.721B	$4.527B	$5.383B	$6.25B	$7.083B	$7.831B	$8.44B	$8.862B	$88.62B
DCF		$2.044B	$2.261B	$2.447B	$2.589B	$2.676B	$2.702B	$2.663B	$2.56B	$2.399B	$2.191B	$21.91B
Value	$46.44B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 38%

Earnings Stability 17%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Over time the ROA has been decreasing indicating a lower marginal ROA with respect to the calculated one, this could impede growth.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Net Margin	-39%	8.3%	16%	48%	15%	-2.3%	15%	5.8%	1.8%	1.8%
ROA	7.1%	13%	14%	19%	12%	-0.85%	21%	10%	3.9%	3.9%
ROE	43%	-13%	-82%	270%	82%	-5.2%	52%	17%	4.9%	5.2%

What is the average Net Margin?

The average Net Margin over the past 5 years is +13.84%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is -6.93%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +10.97%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is -1.71%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +69.3%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is -41.25%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Under the assumption that FCF does not diminish and debt does not increase, the current years to repay the debt are acceptable.

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Debt FCF	-62.92	9.45	12.36	5.35	-29.25	-7.16	2.58	2.91	1.97	2.06
Debt Equity	-1.49	-1.66	-5.19	4.93	6.25	2.40	0.93	0.54	0.39	0.50
MIN
Graham Stability	-	-	-	-	53%	-21%	100%	100%	28%	-21%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 2.06.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is 2.55.

What is the Graham’s Stability?

Graham’s Stability measure stands at -0.21.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has not been increasing in the past years.

Years	12-2016	12-2018	12-2020	12-2022	Trend
Revenue	40%	57%	60%	-4.3%	16%
Net Income	13%	-19%	-	-70%	-36%
Stockholders Equity	-	80%	51%	0.99%	-48%
FCF	32%	33%	-	9.5%	-7.2%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +56.64%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is +15.72%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is -18.77%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is -36.2%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +80.48%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is -48.16%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is +32.9%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is -7.22%.