KeyBanc upgrades Cooper Tire's stock rating
KeyBanc Capital Markets is upgrading its rating on Cooper Tire & Rubber Co.'s stock from "Hold" to "Buy."
According to Managing Director Saul Ludwig, there is "considerable upside" to the current price, which closed at $4.99 a share on April 6, 2009.
"The thrust of the upgrade is based on our beliefs that while the tire industry -- and Cooper Tire -- will be pressured for most of 2009, the news through the balance of 2009 should be less bad than what we have heard recently. Actions being taken by Cooper -- and others -- should pave the way for profitable operations late this year and into 2010."
Pent-up tire demand bodes well Cooper, says Ludwig.
"Consumers in North America have postponed tire purchases for more than a year, so in looking at the various sub-segments of the industry, consumer replacement tires should be the first to improve versus OE consumer or OE and replacement truck; consumer replacement tires in North America is Cooper's area of strength.
"Despite expected losses in both the 1Q and 2Q, along with the lack of high confidence in any particular estimate, the stock is attractive, in our opinion," he adds.