Cleveland-Cliffs Inc. (CLF - Free Report) announced that its employees, represented by the International Association of Machinists and Aerospace Workers (IAM) Local 1943, have ratified a three-year labor agreement. It will cover around 1,825 hourly employees at the company’s AK Steel facility in Middletown, OH.
The contract was ratified through voting held on Mar 18, 2020. Moreover, the agreement is effective until May 15, 2023. Notably, the facility manufactures a wide array of carbon and stainless steel for automotive and other industries.
Per management, the new arrangement offers a competitive labor contract for the company and its employees at AK Steel Middletown Works.
Notably, Cleveland-Cliffs recently completed the acquisition of AK Steel Holding Corporation, combining the largest producer of iron ore pellets downstream in North America into the production of value-added steel and specialty manufactured parts for the automotive industry.
The combined company will have a unique position in the industry. Cleveland-Cliffs will possess a dynamic combination of assets — two efficient integrated blast furnace steel mills along with a new state-of-the-art hot briquetted iron (HBI) facility, two electric arc furnace plants and many other technologically developed facilities.
Shares of Cleveland-Cliffs have plunged 65.5% in the past year compared with the industry’s 31.1% decline.
On the fourth-quarter 2019 earnings call, the company expected average iron ore prices, steel prices and pellet premiums to be $90 per metric ton, $650 per short ton and $50 per metric ton, respectively, for 2020. Based on the assumptions, it expects to generate net income of $300-$325 million and adjusted EBITDA of $550-$575 million for 2020 on a stand-alone basis.
Cleveland-Cliffs Inc. Price and Consensus
Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are Franco-Nevada Corporation (FNV - Free Report) , Barrick Gold Corporation (GOLD - Free Report) and NovaGold Resources Inc. (NG - Free Report) .
Franco-Nevada has a projected earnings growth rate of 24.2% for 2020. The company’s shares have rallied 37.7% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Barrick Gold currently has a Zacks Rank #2 (Buy) and a projected earnings growth rate of 43.1% for 2020. The company’s shares have rallied 21.1% in a year.
NovaGold has a projected earnings growth rate of 11.1% for 2020. It currently carries a Zacks Rank #2. The company’s shares have surged 74.2% in a year.
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