Investors and analysts re-evaluated Cleveland-Cliffs (CLF) last week after the company reported results that juxtaposed an earnings-per-share miss against stronger operating metrics and an assertive outlook. While GAAP EPS for Q2 came in at a loss of $0.20, missing consensus by $0.01, the underlying adjusted figures and forward-looking commentary captured the market's attention.
The Q2 picture
On Jul 23, 2026, Cleveland-Cliffs disclosed Q2 adjusted EBITDA of $286 million, roughly three times the $95 million reported in Q1. Revenue for the quarter was $5.2 billion, in line with consensus estimates, and management said free cash flow turned positive for the first time in two years. Those operational details contrasted with the EPS shortfall, shifting the focus to cash generation and adjusted profitability.
Q3 guidance that changed the debate
Management set Q3 adjusted EBITDA guidance at roughly $575 million, a level materially higher than many on the Street had modeled. That forward-looking figure was the proximate cause for analysts to revisit their assumptions and, in two cases, to raise ratings on the stock.
Two upgrades, different rationales
- BNP Paribas Exane: Moved its rating from Underperform to Neutral and set a target of $11.50, citing that the stronger Q3 guidance removed the prior bear case.
- GLJ Research: Shifted its rating from Hold to Buy with a $15.60 target, implying about 42% upside. GLJ's 2026 adjusted EBITDA estimate is $1.74 billion, versus the Street consensus of $1.49 billion, and it projects 2026 EPS of $0.24 compared with a consensus of -$0.24.
GLJ's revision represents a more assertive reappraisal of Cleveland-Cliffs' forward operating performance, effectively arguing that market expectations had been anchored to an operational profile that management may now be moving past.
Structural drivers highlighted by bullish research
Analysts who turned positive pointed to several structural elements they expect to underpin results going forward:
- Price realization lag - Higher steel prices have not yet fully flowed through existing contracts, leaving room for additional revenue per ton to be recognized over time.
- Cost improvement - Management guided to roughly $10 per ton of cost reduction and indicated that major production outages are behind the company.
- Volume ramp - Shipments are expected to exceed 4.3 million tons in the next one to two quarters, and full-year net tons guidance was reiterated at 16.5 to 17.0 million.
In addition to operational commentary, the firm signaled a leadership transition when CFO Celso Goncalves was promoted to President, a move analysts interpreted as a deliberate management succession step that reinforces internal confidence.
Remaining scepticism among other firms
Not all analysts joined the upgrade camp. Barclays kept an Underweight rating with a $10 target, while JPMorgan remained Neutral, raising its target from $10 to $11. InvestingPro's Fair Value estimate sits at $9.95, which implies about 20% downside from the stock's then-current level of $11.67. Overall, the analyst distribution after the activity stood at 1 Buy, 11 Hold, and 1 Sell, reflecting continued caution among the broader coverage base.
Market reaction and positioning
The stock traded at $11.67, down 2.22% on the day referenced, but it had climbed roughly 27% over the prior month following the guidance and results. The contrast between upgraded targets, such as GLJ's $15.60, and conservative valuations like InvestingPro's $9.95 highlights the divergence in views about how quickly and fully Cleveland-Cliffs can convert higher industry prices and internal cost improvements into sustainable earnings.
What to watch next
Key metrics for investors and analysts include actual shipment volumes in coming quarters, the pace at which contract prices reflect higher spot steel markets, realized cost savings per ton, and whether free cash flow continues to improve. Management's execution against these metrics will be central to validating either the bullish upgrades or the skeptics' more reserved stance.
Summary: Cleveland-Cliffs reported a Q2 adjusted EBITDA of $286 million, set Q3 adjusted EBITDA guidance at about $575 million, and returned to positive free cash flow. Two analysts upgraded the stock citing these developments and structural tailwinds, while others maintained cautious ratings and lower targets.