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    Cleveland-Cliffs (CLF) Is Up 7.6% After DOE-Backed $1B Middletown Modernization Plan - Has The Bull Case Changed?

    Simply Wall St·09/02/2026 23:26:02
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    • Cleveland-Cliffs Inc. recently announced that the U.S. Department of Energy has finalized a framework to rescope a previously awarded US$500 million grant into a US$1.00 billion, 50-50 funded optimization project at its Middletown Works steel plant, to be executed over roughly four years while maintaining ongoing production.
    • The upgraded blast furnace, AI-enabled process controls, and new cogeneration facility capturing blast furnace gas for on-site power and steam position Middletown Works as a test case for combining traditional steelmaking with improved energy efficiency and lower operating costs.
    • We’ll now examine how this DOE-backed US$1.00 billion Middletown Works modernization may influence Cleveland-Cliffs’ investment narrative around technology and efficiency.

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    Cleveland-Cliffs Investment Narrative Recap

    To own Cleveland-Cliffs, you need to believe its integrated steel model can convert today’s low valuation and recent losses into more efficient, higher-margin operations over time. The DOE-backed US$1.00 billion Middletown Works project supports that efficiency angle, but it does not remove near term concerns around leverage, tariff reliance, or the competitive threat from scrap based electric arc furnace steel.

    Among recent developments, the promotion of Celso Goncalves to President and CFO is particularly relevant. With Cleveland-Cliffs committing to a multi-year, capital intensive upgrade at Middletown Works, investors may focus more closely on how the finance team balances this US$500 million company funded spend with ongoing debt service, limited buybacks, and the goal of returning to consistent profitability.

    Yet behind the modernization story, investors should also be aware of the risk that blast furnace focused assets could face rising decarbonization and recycling pressures...

    Read the full narrative on Cleveland-Cliffs (it's free!)

    Cleveland-Cliffs' narrative projects $23.1 billion revenue and $1.2 billion earnings by 2029.

    Uncover how Cleveland-Cliffs' forecasts yield a $11.65 fair value, a 6% downside to its current price.

    Exploring Other Perspectives

    CLF 1-Year Stock Price Chart
    CLF 1-Year Stock Price Chart

    By contrast, the most pessimistic analysts were assuming only about 4.2 percent annual revenue growth and US$538 million of earnings by 2029, so this DOE backed upgrade could meaningfully shift how you weigh those downside scenarios against more constructive views.

    Explore 4 other fair value estimates on Cleveland-Cliffs - why the stock might be worth over 2x more than the current price!

    Form Your Own Verdict

    Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.