In part because of cost-cutting initiatives from both Goodyear Tire & Rubber Co. and Cooper Tire and Rubber Co., KeyBanc Capital Markets has maintained its BUY (2) rating on common stock for both tire manufacturers.
"Gooydear is on track in its cost-cutting strategies and, in some cases, ahead of schedule, in our opinion," says Managing Director Saul Ludwig. He also cited the continued strengthening of both the balance sheet and Goodyear's high-end tire brand as reasons for reaffirming KeyBanc's stock rating.
Planned infusions of capital into the manufacturing facilities (Goodyear will net $1.4 billion from the sale of its Engineered Products division, according to Ludwig) also influenced the rating decision.
For Cooper, Ludwig sees opportunities for expansion of capacity in China, improved name brand products ("specifically the CS4 touring tire") and a strengthening balance sheet.
"We believe that CTB (Cooper's stock) remains undervalued," he adds.
