Discounted Cash Flow (DCF) Analysis Unlevered

Cleveland-Cliffs Inc. (CLF)

$17.9

+0.54 (+3.11%)

All numbers are in Millions, Currency in USD

Stock DCF: -1,735.78 | 17.9 | overvalue

Operating Data

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	2,332.40	1,989.90	5,354	20,444	22,989	48,775.09	103,484.68	219,560.41	465,834.90	988,348.27
Revenue (%)
EBITDA	860.80	496.70	313	4,995	2,034	9,851.95	20,902.59	44,348.41	94,092.73	199,633.79
EBITDA (%)
EBIT	860.80	496.70	5	3,818.92	711.51	7,046.06	14,949.42	31,717.74	67,294.61	142,777
EBIT (%)
Depreciation	-	-	308	1,176.08	1,322.49	2,805.89	5,953.17	12,630.67	26,798.12	56,856.79
Depreciation (%)

Balance Sheet Data

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Total Cash	823.20	352.60	112	48	26	5,409.49	11,477.15	24,350.73	51,664.24	109,614.50
Total Cash (%)
Account Receivables	344	152.60	1,193	2,154	1,960	6,219.98	13,196.74	27,999.14	59,404.95	126,037.74
Account Receivables (%)
Inventories	181.10	317.40	3,828	5,188	5,130	13,940.38	29,576.89	62,752.43	133,139.98	282,479.21
Inventories (%)
Accounts Payable	186.80	193.20	1,575	2,073	2,186	6,514.79	13,822.24	29,326.24	62,220.63	132,011.69
Accounts Payable (%)
Capital Expenditure	-296.10	-656	-525	-3,779.91	-4,250.46	-9,018.08	-19,133.39	-40,594.75	-86,128.70	-182,736.74
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 17.9
Beta	2.240
Diluted Shares Outstanding	557.46
Cost of Debt
Tax Rate	25.67
After-tax Cost of Debt	4.83%
Risk-Free Rate
Market Risk Premium
Cost of Equity	14.055
Total Debt	4,249
Total Equity	9,978.58
Total Capital	14,227.58
Debt Weighting	29.86
Equity Weighting	70.14
Wacc

Build Up Free Cash

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	2,332.40	1,989.90	5,354	20,444	22,989	48,775.09	103,484.68	219,560.41	465,834.90	988,348.27
EBITDA	860.80	496.70	313	4,995	2,034	9,851.95	20,902.59	44,348.41	94,092.73	199,633.79
EBIT	860.80	496.70	5	3,818.92	711.51	7,046.06	14,949.42	31,717.74	67,294.61	142,777
Tax Rate	-99.77%	6.18%	36.79%	21.43%	25.67%	-1.94%	-1.94%	-1.94%	-1.94%	-1.94%
EBIAT	1,719.62	465.98	3.16	3,000.51	528.88	7,182.75	15,239.43	32,333.05	68,600.08	145,546.79
Depreciation	-	-	308	1,176.08	1,322.49	2,805.89	5,953.17	12,630.67	26,798.12	56,856.79
Accounts Receivable	-	191.40	-1,040.40	-961	194	-4,259.98	-6,976.76	-14,802.40	-31,405.81	-66,632.79
Inventories	-	-136.30	-3,510.60	-1,360	58	-8,810.38	-15,636.51	-33,175.53	-70,387.56	-149,339.22
Accounts Payable	-	6.40	1,381.80	498	113	4,328.79	7,307.45	15,504	32,894.39	69,791.06
Capital Expenditure	-296.10	-656	-525	-3,779.91	-4,250.46	-9,018.08	-19,133.39	-40,594.75	-86,128.70	-182,736.74
UFCF	1,423.52	-128.52	-3,383.04	-1,426.32	-2,034.09	-7,771	-13,246.62	-28,104.96	-59,629.48	-126,514.11
WACC
PV UFCF						-6,982.03	-10,693.37	-20,384.38	-38,857.99	-74,073.55
SUM PV UFCF										-150,991.32

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	11.30
Free cash flow (t + 1)	-129,044.40
Terminal Value	-1,387,574.15
Present Value of Terminal Value	-812,419.57

Intrinsic Value

Enterprise Value	-963,410.90
Net Debt	4,223
Equity Value	-967,633.90
Shares Outstanding	557.46
Equity Value Per Share	-1,735.78