Cleveland-Cliffs came into Tuesday’s session riding a sharp 90-day run, with the stock up about 44% before today’s Q3 2026 report. The immediate verdict from traders was cold. The share price slipped 3.2% to US$13.65 by the close.
The headline result tells a different story. Adjusted earnings before interest, taxes, depreciation and amortization jumped to US$612 million, the strongest quarter in three years, powered by higher average selling prices and better unit costs. For an integrated steel producer often viewed as a highly leveraged turnaround, that profit swing is the single data point investors will keep coming back to as they reassess the thesis.
If you like what Cleveland-Cliffs just achieved on profit but prefer steel exposure with stronger balance sheets and steadier fundamentals through the cycle, compare this quarter’s results using our list of solid balance sheet and fundamentals stocks (25 results)
Q3 2026 Earnings Summary
- Revenue (Q3 2026 vs. Q3 2025): US$5,612 million vs. US$4,734 million (higher year on year)
- Net Income (Excl. Extra Items, Q3 2026 vs. Q3 2025): profit of US$154 million vs. loss of US$248 million (swing back to profit)
- Basic EPS (Q3 2026 vs. Q3 2025): US$0.27 per share vs. loss of US$0.50 per share (clear improvement per share)
- Coal Production (Trailing 12 Months to Q3 2026 vs. Trailing 12 Months to Q3 2025): 1,200,000 tons vs. 1,000,000 tons (higher output)
Ask Charlie what Cleveland-Cliffs' 2027 contract resets really lock in.
Cleveland-Cliffs bull story meets hard cost data
The bullish pitch hinges on Cleveland-Cliffs turning footprint work and DOE-backed projects into structurally lower costs and a richer product mix.
"The main factor is continued execution on cost reductions, footprint optimization, and DOE-backed projects so that lower unit costs and a higher value-added steel mix show through consistently in earnings and cash flow."
Q3 points in that direction. Adjusted EBITDA reached US$612 million, shipments rose to 4.2 million tons, and unit costs fell about US$17 per ton, better than guidance. Higher average selling prices and stronger auto shipments suggest early traction, though the long-dated Middletown and Butler projects remain milestones still ahead.
Cleveland-Cliffs bear case tests policy and cost risks
The bear case centers on how fragile this setup could be if policy or input costs move the wrong way.
"The company expects continued unit cost reductions and has already seen periods where input costs moved against it, including an approximately US$80 million negative EBITDA impact from a short lived spike in natural gas, electricity and industrial gases during extreme cold weather, and a repeat or extension of similar cost shocks could offset operational gains and limit improvements in net margins and cash flow."
Recent coal contracts for 2027 rolled over at flat pricing, which helps cap one major variable. Q3 also showed unit costs trending lower. That said, the Canadian galvanized market pressure and management’s push for tighter import restraints underline that trade and energy shocks still sit in the background of this quarter’s strong profit.
Not everyone reads the same price the same way. → See the lower figure this Narrative lands on, and how it gets there.
Hunt For Mispriced Cash Flows
Cleveland-Cliffs just reminded investors that strong quarterly execution does not always translate into immediate share price support. The real opportunity sits in spotting stocks that could be undervalued before expectations adjust.
- Company 1 - 22% below our estimate - ties cloud infrastructure, workplace software and code hosting so enterprise AI spending concentrates on a single ecosystem.
- Company 2 - 29% below our estimate - converts regulated electronics program wins into higher margin production as customers shift complex manufacturing away from internal facilities.
- Company 3 - 38% below our estimate - expands device trade in programs as policy backed recycling subsidies channel consumers toward structured secondhand electronics platforms.
Three companies from the same screener. Open the full list of 35 companies trading below our fair value estimates →
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