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Two of two analysts agree: Buy Cooper stock

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Two industry analysts are high on Cooper Tire & Rubber Co. They both recently reiterated their "Buy" ratings on the company's stock.

Saul Ludwig, a managing director with KeyBanc Capital Markets, increased the company's 2009 earnings per share (EPS) estimates for the fourth quarter and full year.

"Volumes in the quarter appear to be coming in better than expected as demand remains strong," he says. "Our new fourth-quarter volume estimate is up 9%, versus our prior estimate of a 5% increase.

"If December shipments continue at the pace seen in October and November, our 9% volume estimate could prove to be too conservative."

Ludwig says Cooper's plants appear to be running at full capacity: "The company is virtually sold for all of 2010."

Tony Cristello, senior vice president, equity research for BB&T Capital Markets, also has raised his EPS estimates for Cooper, and believes the results "should continue to strengthen over the coming quaters. Here's why:

* improved volumes in the replacement market overall and at Cooper specifically;

* an improved cost structure and manufacturing footprint; and

* likely favorable pricing impact from tariff activity.

"Even our new estimates may prove too conservative as we believe that every point in upside to our forecast of 5.5% growth in North American unit volumes in 2010 would generate approximately $0.05 in incremental EPS," says Cristello.

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