Stock analyst maintains Cooper Tire's rating while raising its price target

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KeyBanc Capital Markets is raising Cooper Tire & Rubber Co.'s price target from $26 to $32. (Cooper's stock closed at $25.87 on June 11.)

"We are raising our price target... based on our increased confidence in management execution," says Saul Ludwig, managing director.

Ludwig sees the following as key investment points.

1. Momentum continues to build at Cooper, with a strong management team leading the way.

2. Margin and cost savings targets are "aggressive, but appear reachable."

3. Cash position is growing and becoming a "positive" problem.

4. Pricing continues to improve despite lower volumes.

5. Cooper has more profitable opportunities as a result of Goodyear Tire & Rubber Co. moving away from the private brand business.

Cooper is "getting strong customer feedback on new high margin tires," says Ludwig.

As a result of the positing outlook, KeyBanc Capital Markets is maintaining its "Buy (2)" rating. However, Ludwig cautions that raw material costs and the threat of imports on unit sales could impede the stock from reaching the price target of $32.

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