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Ludwig: 2Q Goodyear and industry outlook is 'generally positive'

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KeyBanc Capital Markets Inc. is maintaining its "Buy (2)" rating on Goodyear Tire & Rubber Co.'s stock following the end of the second quarter of 2007.

Managing Director Saul Ludwig is increasing his 12-month price target from $39 to $48 a share because of general optimism surrounding Goodyear and the tire industry as a whole.

1. Suppliers and dealers are saying good things about the company, according to Ludwig.

2. Tire pricing is strong.

3. Raw material costs "are moderating."

"The story for the tire industry continues to improve as all companies have been aggressive in eliminating unneeded high cost capacity, thus leading to much firmer prices and better profits," he says.

"Just last week, Bridgestone boosted its profit outlook for 2007, and when 2Q07 results are announced later this month by not only Goodyear but by Cooper, Michelin, Continental, Pirelli and Bridgestone, we should hear a generally positive tone about their outlooks for the balance of 2007."

Goodyear's stock price on the New York Stock Exchange closed at $36.42 on Thursday, July 5.

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