Cleveland-Cliffs Inc. Faces Market Challenges Amid Analyst Downgrades

In a turbulent week for Cleveland-Cliffs Inc., the materials company specializing in steel production has faced a series of downgrades from analysts, raising concerns about its competitive position and exposure to volatile steel prices. As of May 29, 2025, the company’s stock has been under significant scrutiny, with its close price at $6.48, marking a low point in its 52-week range.

Jefferies’ Downgrade and Concerns Over Competition

On May 29, Jefferies downgraded Cleveland-Cliffs, citing increased competition from U.S. Steel as a primary concern. This move was echoed in multiple reports throughout the day, highlighting the company’s high exposure to fluctuations in steel prices. The downgrade reflects a broader sentiment among analysts about the challenges Cleveland-Cliffs faces in maintaining its market position amidst a competitive landscape.

Market Reaction and Analyst Opinions

The market has reacted to these developments with a notable slide in Cleveland-Cliffs’ shares. Earlier in the week, on May 28, GLJ Research further intensified the pressure by cutting the stock to “Sell,” setting a target price of $3.91. This double downgrade led to a significant drop in share value, as reported by multiple sources.

Despite these challenges, some analysts see potential opportunities. On May 27, Jim Lebenthal suggested that Cleveland-Cliffs is undervalued and possesses a credible turnaround plan. This perspective offers a glimmer of hope for investors considering the company’s long-term prospects.

Unusual Trading Activity

Adding to the intrigue, Cleveland-Cliffs experienced unusually large options trading on May 29. Traders acquired 75,548 call options, a 39% increase from the average volume, indicating heightened interest or speculation surrounding the stock.

Investor Considerations

As Cleveland-Cliffs navigates these turbulent waters, investors are advised to closely monitor the company’s strategic responses to competitive pressures and price volatility. The recent analyst downgrades and unusual trading activity underscore the importance of staying informed about market dynamics and potential shifts in the steel industry.

In summary, while Cleveland-Cliffs faces significant challenges, the divergent views among analysts suggest that the company’s future may hinge on its ability to execute its turnaround strategy effectively. Investors should weigh these factors carefully as they consider their positions in the company.