Is Cleveland-Cliffs Stock a Steal Buy After Falling Off the Cliff This Week?
Key Points
Cleveland-Cliffs lost a massive $1.4 billion in 2025.
However, better demand and steel prices should lift earnings and the stock price in 2026.
Shares of Cleveland-Cliffs (NYSE: CLF) got clobbered this week, plunging 32.5% at their lowest point in trading through 11 a.m. Friday, according to data provided by S&P Global Market Intelligence.
The steel stock's fourth-quarter and 2025 results announced this week were nothing to brag about, but investors may be overlooking a significant turning point. Some of the biggest macro challenges of last year are already behind the company, and management sees a strong recovery in 2026 as market dynamics change and steel prices rise.
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Why the steel stock is getting crushed
2025 was a challenging year for Cleveland-Cliffs as demand from its key market, automotive, slumped on declining vehicle production in the U.S.
Cleveland-Cliffs also ended a major five-year steel slab contract with ArcelorMittal USA after sales became unprofitable in 2025, the final year of the deal, due to a tariff-driven gap between the slab contract price and the market price. Cleveland-Cliffs acquired ArcelorMittal USA in 2020, but it came with a catch: a contract to supply steel slabs to steel maker, ArcelorMittal's remaining non-U.S. facilities.
Cleveland-Cliffs' earnings report, released this week, revealed a $1.4 billion net loss for 2025 , roughly twice the 2024 loss.
The steel stock crashed post-earnings, but the sell-off intensified after CEO Lourenco Goncalves sold three million shares at an average price of $12.42 per share on Feb. 11. Although CEOs may sell their shares for several reasons such as tax planning, the magnitude of the sale, especially during the stock's price slump, left investors jittery.
Can Cleveland-Cliffs stock rebound in 2026?
Goncalves expects a much stronger year ahead for Cleveland-Cliffs.
Automotive volumes are recovering, with Cleveland-Cliffs already securing orders from some of its clients, which should show up in revenue and earnings in 2026. Improving end markets have also sent steel prices surging.
With hot-rolled oil-steel sitting at two-year management expects substantially higher realized prices in the first quarter -- nearly $60 per ton higher sequentially -- and even better prices as the year progresses.
Meanwhile, Cleveland-Cliffs' Canadian subsidiary Stelco should see better days ahead, what with the Canadian government imposing restrictions on steel imports from December 2025.
Cleveland-Cliffs looks like a potential turnaround stock worth watching in 2026.
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Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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