Cleveland-Cliffs Just Did Something It Hadn't Done in Two Years

 Cleveland-Cliffs Just Did Something It Hadn't Done in Two Years—And the $4 Billion Outlook Is Why Wall Street Is Paying Attention

**By [Your Name] | October 19, 2026 | 12-Minute Read**

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## The Short Version (For the Busy American)

Cleveland-Cliffs just delivered its first profitable quarter after eight straight quarters of losses, and the stock is rewarding investors in a big way.

The steelmaker reported **adjusted earnings per share of 26 cents** for the third quarter, a stunning turnaround from the **45-cent loss** it posted a year ago and a nickel ahead of Wall Street's estimates. Revenue grew **18.5% to $5.61 billion**—its strongest quarter since early 2024 .

But the number that sent the stock surging **12.8% to $13.67** in early trading was the guidance: Cliffs expects **2027 adjusted EBITDA to exceed $4 billion**. Analysts were forecasting just **$2.66 billion** . That's a gap of roughly 50%, and it's the reason CLF cleared a **buy point of $13.22** from a consolidation base stretching back to June .

**The punchline:** Cleveland-Cliffs has been the laggard of the American steel industry for years—saddled with debt from a disastrous Canadian acquisition, battered by the U.S.-Canada trade war, and written off by investors. This quarter, CEO Lourenco Goncalves proved the doubters wrong. But the stock is still down roughly 9% this year, and the path to $4 billion runs through Canadian trade disputes, union negotiations, and steel prices that could go either way.

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## The Numbers That Matter

Let's cut through the noise and get to what actually counts.

### The Q3 Beat

| Metric | Q3 2026 | Q3 2025 | Change |

|--------|---------|---------|--------|

| **Adjusted EPS** | **$0.28** | -$0.45 | **Turnaround** |

| **Revenue** | $5.61 billion | $4.73 billion | +18.5% |

| **Adjusted EBITDA** | **$612 million** | -$135 million (FY25) | +$326M QoQ |

| **Steel Shipments** | 4.2 million tons | 4.0 million tons | +5% |

| **Avg. Selling Price** | **$1,177/ton** | $1,032/ton | +$145/ton |

*Source: Company earnings, SEC filing* 

The EBITDA figure is the star. Cliffs guided to **$575 million** three months ago. It delivered **$612 million**. That's a beat of **$37 million**, driven by higher shipments, better pricing, and unit costs that fell **$17 per ton**—better than management's own $10-per-ton target .

### The 2027 Bombshell

Here's the number that changed everything: **$4 billion+ in adjusted EBITDA for 2027**.

To put that in perspective, Cliffs generated **$612 million** in Q3. Annualized, that's roughly **$2.4 billion**. The 2027 guide implies **more than $1 billion per quarter**—a level the company hasn't seen since 2021, when EBITDA peaked at **$5.14 billion** before collapsing to negative territory by 2025 .

How does Goncalves get there? **Contract renewals**. More than half of Cliffs' 2027 contracts are already locked in, with the process expected to be substantially complete by Thanksgiving. The company says the aggregate improvement from these renewals will generate **more than $1 billion in year-over-year EBITDA improvement** before any change in steel prices .

Customers aren't just accepting higher prices. They're **desperate for volume**. Goncalves said nearly all customers are seeking more contracted steel for 2027 than they had in 2026, with lead times near pandemic highs .

### The Q4 Bridge

Cliffs expects **$715 million** in Q4 adjusted EBITDA, up from Q3 despite seasonal slowdowns and maintenance outages. Selling prices are expected to rise another **$45 to $55 per ton** sequentially as the company works through its backlog .

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## The Human Touch: What This Means for Real Americans

Let me put this in terms that actually connect to your life.

### If You Own CLF Stock

You've been through hell. The stock hit a 52-week low of **$7.73** and a high of **$16.70**. It's been a punching bag for anyone who bet on American steel .

Monday's move is a reprieve. But the stock is still down roughly **9% this year** while the S&P 500 has gained nearly 12% . The buy point at **$13.22** is the first technical signal in months that the tide might be turning. The 5% buy zone runs through **$13.88** .

If you're a long-term holder, the question is whether $4 billion in EBITDA is real or another Goncalves promise. The company has missed big before.

### If You Work in American Steel

Cliffs employs thousands of workers across the Midwest and in Canada. The company's turnaround means **job security** for American steelworkers—and potentially more hiring if the 2027 outlook materializes.

But there's a catch. Cliffs is **idling the galvanizing lines at its Stelco operations in Canada**, a move that affects roughly **500 workers**. The Canadian government is threatening to force Cliffs to **sell its Canadian assets** if it doesn't honor employment commitments made when it acquired Stelco in 2024 . Goncalves called the Canadian response **"bullying and harassment"** .

The irony: Stelco is finally profitable, but only because Cliffs is shutting down the unprofitable parts.

### If You're Watching the Steel Trade

Cliffs' fortunes are tied to **tariffs**. The company has been a vocal beneficiary of Trump's trade policies, which have restricted cheap foreign steel from flooding the U.S. market. Goncalves praised the trade blocks in Monday's earnings call, and the stock's rally is partly a bet that those protections will continue .

But tariffs cut both ways. The U.S.-Canada trade war hurt Stelco. And if the political winds shift—if tariffs are rolled back or Canada retaliates further—Cliffs' pricing power could evaporate.

### The Debt Question

Cliffs carries **$7.72 billion in total debt** . The company's target is to get net debt below **2.5x EBITDA by mid-2027**. At $4 billion in EBITDA, that target becomes achievable. At $2.5 billion, it doesn't.

Goncalves said Q4 will bring **"major debt reduction"** from free cash flow and property sale proceeds . That's the bridge to a healthier balance sheet—and a higher stock price.

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## Frequently Asked Questions

### What exactly did Cleveland-Cliffs report?

Adjusted EPS of **26 cents** (or 28 cents on some adjusted bases), beating estimates of 24-25 cents. Revenue of **$5.61 billion**, slightly below forecasts. Adjusted EBITDA of **$612 million**, above the company's own $575 million guidance. It was the first profitable quarter after eight consecutive losses .

### Why did the stock jump so much?

The **2027 guidance**. Cliffs said it expects adjusted EBITDA to exceed **$4 billion** next year, versus analyst consensus of roughly **$2.66 billion**. That's a 50% gap, and it implies the company's contract renewals are pricing in much higher steel prices and volumes than the market expected .

### What is driving the 2027 outlook?

Three things: **(1) Contract renewals** with customers who want more volume and are accepting higher prices. **(2) Stelco's return to profitability** after Canadian hot-rolled steel prices improved. **(3) Pricing momentum**—U.S. hot-rolled coil prices have risen roughly $40 per ton each month for most of this year, and Cliffs sees no slowdown in its order book .

### Is the $4 billion EBITDA target realistic?

**It's aggressive but not impossible.** Cliffs generated **$5.14 billion** in EBITDA in 2021 when steel prices were at cyclical highs. The company is arguing that contract resets and volume gains will get it back to that neighborhood. But steel prices are cyclical, and a slowdown in automotive or construction demand could derail the forecast.

### What is the buy point for CLF stock?

The **buy point is $13.22**, from a handle formation at the end of a consolidation stretching back to June. The 5% buy zone runs through **$13.88**. There's also a longer-term cup-with-handle buy point at **$15.06** .

### What's the risk with Canada?

Canada is threatening to force Cliffs to **sell its Canadian assets** (Stelco) if it proceeds with layoffs of up to 500 workers. Cliffs says the layoffs are temporary and necessary because of U.S. tariffs on Canada. The dispute could escalate, and a forced sale would be a major distraction and potentially a financial hit .

### What about the union negotiations?

Cliffs' contract negotiations with the **United Steelworkers (USW)** have extended past the original deadline. Goncalves said he has "no doubt" an agreement will be reached that rewards employees while keeping the company competitive. A strike would be a major risk to the 2027 outlook .

### What are the bear arguments?

**Valuation**: The stock's trailing EV/EBITDA is inflated by depressed earnings, and the InvestingPro fair value is **$10.61**—below the current price. **Revenue miss**: Q3 revenue came in $110 million short of estimates. **Price risk**: Wells Fargo's 2027 model assumes hot-rolled coil at $1,000 per ton, versus spot near $1,250. If supply catches up with demand, prices could fall .

### Is this a buy?

I can't give personalized investment advice. What I can tell you is that **the technical signal is bullish** (clearing a buy point), **the fundamental catalyst is massive** ($4 billion EBITDA guide vs. $2.66 billion consensus), and **the risk is real** (Canada, unions, steel prices). This is a high-beta, cyclical stock. It can move fast in both directions.

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## The Path Forward: What to Watch

### The Contract Renewal Completion

Cliffs says the renewal process will be **substantially complete by Thanksgiving**. If the company locks in the contracts that underpin the $4 billion guide, the thesis strengthens. If renewals stall or customers push back, the outlook weakens.

### The Canada Dispute

Watch for **escalation or resolution**. A forced sale of Stelco would be a distraction and a financial hit. A negotiated settlement would remove an overhang.

### Steel Prices

Hot-rolled coil prices are the single biggest variable. Cliffs' outlook assumes **prevailing index price forecasts**. If prices hold or rise, the $4 billion target is achievable. If they fall, the target becomes a stretch.

### The USW Negotiations

A strike would cripple production and derail the 2027 plan. Watch for progress in the coming weeks.

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## Conclusion: The Comeback Story That Isn't Over Yet

Here's what I want you to take away from Cleveland-Cliffs' quarter.

This is a company that was left for dead. Eight straight quarters of losses. A Canadian acquisition that turned into a disaster. A trade war that punished its cross-border operations. A stock that fell to $7.73 and stayed there for months.

Monday, Goncalves proved the doubters wrong. **$612 million in EBITDA**. First profit in two years. A **$4 billion guide** that's 50% above what Wall Street expected. A stock that cleared a **buy point** for the first time since early summer.

But the comeback isn't complete. The stock is still down 9% this year. Canada is threatening to force a sale of Stelco. The union contract isn't signed. And steel prices, the ultimate arbiter of Cliffs' fate, could turn at any moment.

The buy signal is real. The $4 billion outlook is bold. Whether it's achievable depends on forces Goncalves can't control—and a few he can.

For American investors, the message is clear: **Cleveland-Cliffs just gave you a reason to look again**. But it's still a steel stock—cyclical, volatile, and exposed to the whims of trade policy and global commodity markets.

The sleeper hit thesis lives. The question is whether it wakes up all the way.

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## Disclaimer

This article is for informational purposes only and does not constitute financial advice, investment advice, or a recommendation to buy or sell any securities. The author is not a licensed financial advisor. All investments involve risk, including the potential loss of principal. Past performance does not guarantee future results. Readers should conduct their own research and consult with a qualified financial professional before making any investment decisions. Data and figures cited are accurate as of the date of publication but may change. The author holds no position in any securities mentioned.

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