Cooper Tire & Rubber Co.'s stock has received an aggressive Buy (1) rating from KeyBanc Capital Markets Inc. Saul Ludwig, managing director at KeyBanc, expects the company to achieve $100 million in savings in 2007.
(Cooper's stock price on the New York Stock Exchange closed at $17.64 on Monday, Dec. 24, 2007.)
Cooper is making very good progress in North America in resolving its production issues, according to Ludwig. "We believe Cooper Tire & Rubber Co. is close to achieving the full benefit of the reconfiguration of its production operations, with longer runs of high-volume lines taking place in three plants while shorter runs of lower volume lines have been moved to its 'swing' plant in Texarcana."
Ludwig reiterates KeyBanc's aggressive rating for Cooper despite a steady increase in Cooper's product liability costs each quarter during 2007.
For the year, he estimates the company's liability costs will be $70 million, up 10% over the previous year. Ludwig estimates Cooper's product liability costs will rise another 7% in 2008.
Cooper will raise its passenger and light truck tire prices up to 5% on Feb. 1.
