DCF Tool

CLF

Cleveland-Cliffs Inc – Iron Ore Mining
Cleveland-Cliffs, Inc. (Cliffs) is the largest flat-rolled steel producer in North America. Founded in 1847 as a mine operator, the company is also the largest producer of iron ore pellets in North America. In 2020, Cliffs acquired two major steelmakers, AK Steel and ArcelorMittal USA, vertically integrating its legacy iron ore business with quality-focused steel production and emphasis on the automotive end market. Its fully integrated portfolio includes custom-made pellets and hot briquetted iron (HBI); flat-rolled carbon steel, stainless, electrical, plate, tinplate and long steel products; as well as carbon and stainless steel tubing, hot and cold stamping and tooling. Headquartered in Cleveland, Ohio, Cliffs employ approximately 25,000 people across its mining, steel and downstream manufacturing operations in the United States and Canada.
Analysis Results
Intrinsic Value $260.02
Latest Price $18.38
Relative Value 93% undervalued
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Cash Flow (Billions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 21.8%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 3.8%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 21.8%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2023 2.25 2.17
2024 2.74 2.54
2025 3.34 2.98
2026 4.07 3.5
2027 4.95 4.1
Terminal Value

Assuming the company was sold after the projection period at an exit multiple of 30, the terminal value of the company would be 149 billion. This corresponds to a present value of 119 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 15.3 billion. Adding in the terminal value gives a total present value of 134 billion.

There are presently 515.0 million outstanding shares, so the intrinsic value per share is 260.02.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 7,422,000,000
Current Cash 26,000,000
Current Liabilities 3,549,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 3,847,000,000
Change in NCWC -197,000,000
EBIT 2,053,000,000
Tax Provision 423,000,000
Depreciation and Amortization 1,034,000,000
Capital Expenditure -943,000,000
Unlevered Free Cash Flow 1,463,470,489
Current Assets 7,653,000,000
Current Cash 48,000,000
Current Liabilities 3,561,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 4,044,000,000
Change in NCWC 1,787,000,000
EBIT 4,112,000,000
Tax Provision 773,000,000
Depreciation and Amortization 897,000,000
Capital Expenditure -705,000,000
Unlevered Free Cash Flow 5,255,192,479
Current Assets 5,298,000,000
Current Cash 112,000,000
Current Liabilities 2,929,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 2,257,000,000
Change in NCWC 2,121,100,000
EBIT 8,000,000
Tax Provision -111,000,000
Depreciation and Amortization 308,000,000
Capital Expenditure -525,000,000
Unlevered Free Cash Flow 1,912,100,000
Current Assets 897,900,000
Current Cash 352,600,000
Current Liabilities 409,400,000
Current Debt 0
Non-Cash Working Capital (NCWC) 135,900,000
Change in NCWC -52,300,000
EBIT 456,300,000
Tax Provision 17,600,000
Depreciation and Amortization 85,100,000
Capital Expenditure -639,000,000
Unlevered Free Cash Flow -175,631,752
Current Assets 1,479,600,000
Current Cash 823,200,000
Current Liabilities 468,200,000
Current Debt 0
Non-Cash Working Capital (NCWC) 188,200,000
Change in NCWC 103,500,000
EBIT 692,800,000
Tax Provision -475,200,000
Depreciation and Amortization 89,000,000
Capital Expenditure -208,600,000
Unlevered Free Cash Flow 676,700,000
Current Assets 1,544,600,000
Current Cash 1,007,700,000
Current Liabilities 452,200,000
Current Debt 0
Non-Cash Working Capital (NCWC) 84,700,000
Change in NCWC -25,400,000
EBIT 395,900,000
Tax Provision -252,400,000
Depreciation and Amortization 87,700,000
Capital Expenditure -151,700,000
Unlevered Free Cash Flow 306,500,000
Current Assets 824,600,000
Current Cash 323,400,000
Current Liabilities 391,100,000
Current Debt 0
Non-Cash Working Capital (NCWC) 110,100,000
Change in NCWC -5,700,000
EBIT 271,500,000
Tax Provision -12,200,000
Depreciation and Amortization 115,400,000
Capital Expenditure -69,100,000
Unlevered Free Cash Flow 312,100,000
Current Assets 982,700,000
Current Cash 285,200,000
Current Liabilities 581,700,000
Current Debt 0
Non-Cash Working Capital (NCWC) 115,800,000
Change in NCWC -179,900,000
EBIT 126,400,000
Tax Provision 169,300,000
Depreciation and Amortization 134,000,000
Capital Expenditure -80,800,000
Unlevered Free Cash Flow -68,669,073
Current Assets 1,448,900,000
Current Cash 290,900,000
Current Liabilities 958,600,000
Current Debt 96,300,000
Non-Cash Working Capital (NCWC) 295,700,000
Change in NCWC 135,800,000
EBIT 224,000,000
Tax Provision -1,302,000,000
Depreciation and Amortization 504,000,000
Capital Expenditure -284,100,000
Unlevered Free Cash Flow 579,700,000
Current Assets 1,560,000,000
Current Cash 335,500,000
Current Liabilities 1,085,500,000
Current Debt 20,900,000
Non-Cash Working Capital (NCWC) 159,900,000
Change in NCWC -7,500,000
EBIT 784,300,000
Tax Provision 55,100,000
Depreciation and Amortization 593,300,000
Capital Expenditure -861,600,000
Unlevered Free Cash Flow 404,342,540
Current Assets 1,650,000,000
Current Cash 195,200,000
Current Liabilities 1,381,500,000
Current Debt 94,100,000
Non-Cash Working Capital (NCWC) 167,400,000
Change in NCWC 316,800,000
EBIT 342,000,000
Tax Provision 255,900,000
Depreciation and Amortization 525,800,000
Capital Expenditure -1,127,500,000
Unlevered Free Cash Flow 57,100,000

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