Abstract
Cleveland-Cliffs will report its quarterly results on July 23, 2026 Pre-Mkt; investors are watching whether pricing, mix, and cost actions can narrow losses as forecasts imply year-over-year improvement across revenue, EBIT, and adjusted EPS.Market Forecast
Consensus for the current quarter points to total revenue of 5.20 billion US dollars, up 5.46% year over year, with adjusted EPS estimated at -0.19, an improvement of 73.78% year over year; EBIT is projected at -35.91 million US dollars, improving 87.55% year over year. Forecasts for gross profit margin and net profit margin have not been disclosed in the period under review.Steelmaking remains the core revenue engine; the last reported quarter showed steelmaking revenue of 4.76 billion US dollars (96.65% of total), and the current quarter forecast embeds modest sequential volume and price support. Within the portfolio, stainless and electrical steel is a key area to watch, with last quarter revenue of 0.47 billion US dollars; year-over-year change for this segment was not disclosed during the period under review.
Last Quarter Review
The prior quarter delivered revenue of 4.92 billion US dollars, gross profit margin of -1.67%, a GAAP net loss attributable to shareholders of 237.00 million US dollars (net profit margin -4.82%), and adjusted EPS of -0.42, an improvement of 58.00% year over year.A notable detail was the top-line beat versus estimates by 144.51 million US dollars, while EBIT of -213.00 million US dollars improved 60.41% year over year and the net result improved quarter over quarter by 2.47%. On mix, steelmaking contributed 4.76 billion US dollars, or 96.65% of total, with the consolidated top line up 6.33% year over year.
Current Quarter Outlook
Core steelmaking operations
The near-term setup for Cleveland-Cliffs’ core steelmaking business reflects the interplay of contract pricing lags, realized spot indices, and customer schedules. The sales mix remains anchored by automotive and service center demand, where multi-quarter contracts can delay the pass-through of spot price changes into realized revenue. Against this backdrop, the company’s forecast implies revenue of 5.20 billion US dollars for the quarter, up 5.46% year over year, and a sharply narrower EBIT loss of -35.91 million US dollars, an 87.55% year-over-year improvement.Shipments should benefit from steady order intake into contract channels and a relatively constructive pricing environment earlier in the quarter that, based on execution timing, can support realized average selling prices. The pricing cadence that lifted hot-rolled coil earlier in the period, combined with the firm’s value-added product mix, can help mitigate margin pressure from residual inflation in labor, logistics, and energy. Given that last quarter’s gross margin was -1.67% and consolidated net margin -4.82%, incremental volume leverage and any uplift in value-added realizations will be key to bringing margins closer to breakeven.
Cost control and process improvements remain central to the path of recovery. With EBIT improving 60.41% year over year last quarter and the current quarter guided to further year-over-year improvement, the company’s operating plan appears to be focused on labor efficiency, maintenance optimization, and procurement savings. The net result last quarter improved quarter over quarter by 2.47%; sustaining and expanding that trajectory will depend on disciplined execution against input costs and throughput. Given the breadth of flat-rolled products across coated, hot-rolled, and cold-rolled lines, throughput stability and mix optimization are likely to be as important as price in determining this quarter’s conversion margins.
Stainless and electrical steel
The stainless and electrical steel portfolio offers an important margin lever this quarter due to its differentiated pricing and limited domestic availability. Last quarter, this category posted revenue of 0.47 billion US dollars, representing 9.45% of total revenue. While year-over-year growth for this specific segment was not disclosed during the period reviewed, order patterns from transformer and equipment customers have remained firm, supporting pricing discipline and shipment stability into the quarter.Execution in oriented electrical steel is crucial, as production reliability and on-time delivery carry a premium in customer relationships in power equipment. Demand visibility from utility and infrastructure customers, combined with the company’s established capabilities in electrical steels, can provide a steadier contribution versus more cyclical commodity lines. If realized spreads in stainless and electrical steel remain at recent levels, the category can contribute outsize incremental margin dollars relative to its revenue share, thereby aiding consolidated margin normalization even as the broader sheet market navigates price fluctuations.
Management’s operational initiatives in downstream processing and customer service can create further headroom for margin capture in this segment. By enhancing scheduling, scrap recovery, coating line uptime, and quality yields on electrical grades, the company can translate stable order books into more predictable conversion costs and reduce rework. The company has also been integrating analytics across plant and commercial workflows; as those tools scale, they may support more precise product allocation to the highest-contribution orders within stainless and electrical steel, improving contribution margins without relying solely on broader market pricing.
Key stock price drivers this quarter
The most immediate driver will be realized price versus cost for the quarter: investors will parse average selling prices in core sheet versus prior quarter levels, and compare these to unit cost trajectories for iron units, alloys, and energy. With revenue estimated at 5.20 billion US dollars and adjusted EPS at -0.19, the degree of improvement versus last quarter’s -0.42 will be assessed in the context of price-cost spread expansion and any productivity gains. Commentary on July and August order books, as well as contract reset timing for the second half of the year, will shape how the market extrapolates today’s quarter into the next two reporting periods.Demand cadence from automotive and service centers will matter, particularly any signals on model-year transitions and planned customer downtime that could affect shipping days. Investors will be looking for granularity on shipment mix and the balance between contract and spot volumes. On costs, updates about planned maintenance, energy procurement, and scrap and alloy surcharge dynamics will be scrutinized for their impact on conversion costs. With last quarter’s gross margin at -1.67%, evidence of improved yields and lower variable costs would underpin the thesis for margin recovery.
Another theme is the adoption of digital and analytics tools across operations and commercial processes. Management’s work to deploy such platforms is intended to tighten the link between demand forecasting, pricing, and production scheduling. Any concrete examples of cycle-time reduction, lower inventories for equivalent service levels, or better pricing discipline documented in the quarter’s commentary would bolster investor confidence that margin improvement can be sustained beyond transitory pricing windows. Finally, capital allocation and liquidity posture will be in focus given the prior quarter’s net loss; clarity on debt metrics, capex commitments, and working capital discipline can help frame the path toward positive free cash generation as margins normalize.
Analyst Opinions
The majority stance among institutions in the last six months is cautious, with bearish/cautious views outnumbering bullish ones by roughly 7 to 1. The preponderance of Hold or Equalweight ratings, coupled with at least one Underweight, signals a market that seeks clearer evidence of margin expansion before turning constructive on the earnings path.Several well-followed firms have reinforced a wait-and-see approach. Morgan Stanley downgraded its stance to Equalweight with a price objective of 12.50 US dollars on June 22, 2026, citing a more balanced risk-reward until execution delivers more consistent margin gains. J.P. Morgan has maintained a Hold rating in multiple updates this year, and more recently trimmed its price target to 10.00 US dollars on July 16, 2026, reflecting tempered near-term expectations for earnings progression. Wells Fargo has reiterated Hold with targets in the 9.00 to 14.00 US dollars range during the period, underscoring a neutral risk posture pending a clearer inflection in profitability.
On the bearish side, Barclays initiated with Underweight and a 9.00 US dollars target during the review window, highlighting concerns around the timing and durability of margin recovery in the absence of a sustained price backdrop. Bank of America has adjusted targets toward the low double digits in recent weeks, which aligns with the broader hold-leaning consensus that prioritizes proof of cost-out and price realization over top-down multiple expansion. While there was an upgrade from GLJ Research to Hold from Sell, with a higher target predicated on tighter supply dynamics earlier in the period, most large houses remain reserved in their short-term outlook.
What unifies the majority view is the emphasis on visibility and proof points. Institutions want to see the forecasted year-over-year improvements — revenue up 5.46%, EBIT loss narrowed by 87.55%, and adjusted EPS improvement of 73.78% — translate into a tangible shift in gross and net margins. Specifically, the last quarter’s gross margin of -1.67% and net margin of -4.82% set a baseline; analysts are looking for credible commentary that sequential mix, pricing carryover, and cost execution can lift these figures toward breakeven in the second half. Where valuation debates arise, they are often anchored to the path and timing of positive free cash flow rather than any single quarter’s accounting EPS.
The cautious majority expects this quarter’s print to show progress but not resolution. That means revenue and EBIT should align with forecasted improvements, yet the bar for a rerating remains higher: a combination of demonstrable price-cost spread expansion, sustained improvement in operational metrics like yield and uptime, and early signs that downstream value-added categories — such as stainless and electrical steel — can shoulder a relatively larger portion of margin contribution. If management offers quantitative color on sequential realized prices and unit costs, alongside a measured outlook for shipment cadence into the next quarter, that would address the primary concerns flagged in institutional notes during the period.
In summary, the dominant institutional perspective is cautiously positioned ahead of July 23, 2026. The group’s stance centers on confirmation that the forecasted year-over-year improvements are underpinned by structural, not transient, drivers across pricing, mix, and costs. A report that pairs the expected revenue and EBIT trajectory with convincing evidence of margin normalization and operational discipline would be the most effective counterpoint to the current cautious consensus.
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