Cleveland-Cliffs Stock Ready for a Bull Run as Market Expects Significant EPS Growth

Cleveland-Cliffs stock is undervalued and poised for a bull run, according to market consensus. With a forward P/E ratio of 0.5x, the stock needs to rally to price in 50% of EPS growth. Institutional investors are also taking notice, with State Street Corp. increasing their holdings by 20.2%. A rotation back to fundamentals could lead to a breakout for this stock.

Cleveland-Cliffs Inc. (NYSE:CLF) has been a subject of interest among institutional investors, with State Street Corporation (NYSE:STT) increasing its holdings by 20.2% in the first quarter of 2025. This significant increase in holdings, coupled with a forward P/E ratio of 0.5x, suggests that the stock may be undervalued and poised for a bull run. To understand the potential of Cleveland-Cliffs, let's delve into the fundamentals and recent market trends.

State Street, one of the world's leading custodian banks, has been actively increasing its stake in Cleveland-Cliffs, indicating a strong belief in the company's prospects. The 20.2% increase in holdings by State Street, which now owns a substantial portion of the company's stock, signals a positive outlook from one of the most influential institutional investors [1].

Cleveland-Cliffs, a leading producer of iron ore and steelmaking products, has been trading at a forward P/E ratio of 0.5x, which is significantly lower than the industry average. This valuation metric suggests that the stock is undervalued, as it needs to rally to price in 50% of EPS growth. Given the company's strong fundamentals and the recent increase in institutional holdings, a rotation back to fundamentals could lead to a breakout for Cleveland-Cliffs stock.

Institutional investors are not the only ones taking notice. Analysts have also been bullish on Cleveland-Cliffs, with several firms upgrading their ratings and target prices. For instance, Wells Fargo & Company recently lifted their target price on shares of Cleveland-Cliffs from $113.00 to $121.00 and gave the stock an "overweight" rating [2].

Moreover, Cleveland-Cliffs' earnings growth has been impressive. The company reported a 9.68% increase in earnings per share (EPS) in the first quarter of 2025, beating analysts' expectations. This strong performance is a result of the company's strategic initiatives, such as cost-cutting measures and expansion into new markets [3].

In conclusion, Cleveland-Cliffs stock appears to be undervalued and poised for a bull run. The significant increase in institutional holdings, coupled with a low forward P/E ratio, suggests that the stock may be a strong performer in the coming quarters. As the market continues to rotate back to fundamentals, investors should keep an eye on Cleveland-Cliffs for potential upside.

References:
[1] https://www.marketbeat.com/instant-alerts/filing-ameriprise-financial-inc-trims-stock-holdings-in-state-street-corporation-stt-2025-08-23/
[2] https://www.marketbeat.com/analyst-ratings/cleveland-cliffs-inc-clf/
[3] https://www.marketbeat.com/stocks/cleveland-cliffs-inc-clf-earnings/