Cleveland-Cliffs Inc. (NYSE:CLF) Shifts Focus to Automotive-Grade Steel

• Cleveland-Cliffs Inc. (NYSE:CLF) surpasses estimated EPS but faces a slight revenue shortfall in its latest earnings report.

• The company is strategically moving towards producing automotive-grade steel, aiming to enhance its market position in the automotive industry.

• Despite current negative earnings, CLF's venture into the rare earths mining sector and strategic focus on higher-value products could lead to future growth and diversification.

Cleveland-Cliffs Inc. (NYSE:CLF) is a leading steel producer in the United States, known for its focus on producing high-quality steel products. The company is strategically shifting towards automotive-grade steel, aiming to secure a stronger foothold in the automotive industry. This move is supported by new contracts with original equipment manufacturers (OEMs), which could enhance its market position.

On October 20, 2025, CLF reported an earnings per share (EPS) of -$0.45, surpassing the estimated EPS of -$0.48. Despite this, the company faced a revenue shortfall, generating approximately $4.73 billion, slightly below the estimated $4.79 billion. This reflects a decline from the previous year's loss of $0.33 per share, as highlighted by Zacks.

Cleveland-Cliffs is reducing its capital expenditures, aiming for better margins and improved revenue quality in 2026. The conclusion of the ArcelorMittal slab supply contract and a cyclical recovery in steel prices are expected to provide significant upside for the company. This strategic focus on higher-value products could lead to enhanced profitability.

The company is also venturing into the rare earths mining sector, signaling a significant pivot in its business strategy. This move has been positively received by the market, with the stock experiencing a jump. The ambition to enter the rare earths game could open new avenues for growth and diversification, despite current negative earnings.

Financially, CLF has a price-to-earnings (P/E) ratio of -4.74, indicating negative earnings. Its price-to-sales ratio is 0.42, suggesting the stock is valued at 42 cents for every dollar of sales. The debt-to-equity ratio is 1.28, showing more debt than equity, but a current ratio of 2.04 indicates strong liquidity to cover short-term liabilities.