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ITT Signs 10-Year Strategic Agreement With Continental AG
ITT Inc. (ITT - Free Report) recently inked a 10-year strategic agreement with global automotive supplier Continental AG (Continental) to provide aftermarket brake pads. The agreement is likely to generate revenues exceeding $1 billion during the contract term.
Per the deal, ITT Friction Technologies (Friction) will supply aftermarket brake pads to Continental. Friction operates under ITT’s Motion Technologies segment, which generates more than 45% of the total company revenues. It manufactures aftermarket brake pads and original equipment brake pads for passenger cars and light commercial vehicles.
According to the three parts included in the agreement, ITT will produce ATE premium line brake pads for cars and light commercial vehicles. It also includes a brand licensing agreement that will allow Continental to market and sell brake pads from ITT brand Galfer and an exclusive agreement for manufacturing other Galfer braking products for cars and light commercial vehicles.
ITT Inc. Price
ITT Inc. price | ITT Inc. Quote
ITT and Continental have been partners for over 45 years in the automotive aftermarket. Under the existing aftermarket agreement, ITT’s 2022 sales to Continental were roughly 8% of its overall revenue and 18% of total Motion Technologies revenue. The new contract will take effect from Jan 1, 2024 (immediately after the expiration of the existing agreement) and will run through Dec 31, 2033.
Zacks Rank and Stocks to Consider
ITT currently carries a Zacks Rank #3 (Hold). Some better-ranked companies are discussed below:
Deere & Company (DE - Free Report) presently sports a Zacks Rank #1 (Strong Buy). DE’s earnings surprise in the last four quarters was 4.7%, on average. You can see the complete list of today’s Zacks #1 Rank stocks.
In the past 60 days, estimates for Deere & Company’s fiscal 2023 earnings have increased 8.7%. The stock has rallied 14% in the past six months.
Allegion plc (ALLE - Free Report) presently carries a Zacks Rank #2 (Buy). ALLE’s earnings surprise in the last four quarters was 10.3%, on average.
In the past 60 days, Allegion’s earnings estimates have increased 4.1% for 2023. The stock has gained 16.7% in the past six months.