Is Cleveland-Cliffs Stock a Steal Buy After Falling Off the Cliff This Week?

Core Viewpoint - Cleveland-Cliffs' stock has experienced a significant decline, dropping 32.5% at its lowest point, primarily due to disappointing earnings and macroeconomic challenges, but there are signs of potential recovery in 2026 as market dynamics improve and steel prices rise [1][2][4]. Financial Performance - Cleveland-Cliffs reported a net loss of $1.4 billion for 2025, which is approximately double the loss from 2024 [6]. - The company ended a major five-year steel slab contract with ArcelorMittal USA in 2025 due to unprofitability stemming from a tariff-driven price gap [5]. Market Dynamics - The automotive sector, a key market for Cleveland-Cliffs, faced a slump in demand due to declining vehicle production in the U.S. during 2025 [4]. - However, management anticipates a recovery in automotive volumes and has already secured orders from clients, which is expected to positively impact revenue and earnings in 2026 [7]. Price Trends - Steel prices are expected to rise, with hot-rolled oil-steel prices projected to be nearly $60 per ton higher sequentially in the first quarter of 2026, with further improvements anticipated throughout the year [8]. - The Canadian subsidiary, Stelco, is expected to benefit from government-imposed restrictions on steel imports starting December 2025, which may enhance its market position [8]. Investment Outlook - Cleveland-Cliffs is viewed as a potential turnaround stock worth monitoring in 2026, given the anticipated recovery in market conditions and pricing [8].