Stock falls following Cooper's lowered rating by KeyBanc
KeyBanc Capital Markets lowered its rating for Cooper Tire & Rubber Co. to "hold" from "aggressive buy."
Stock fell 10% to $15.50 following the announcement.
KeyBanc based the reduction on lower than expected replacement tire volumes in North America for both Cooper and the industry and continued costs associated with the company's start-up and marketing costs for the Cooper-Kenda and Cooper-Chengshan joint ventures in China.
The recent tire recall (see "Cooper voluntarily recalls 48,000 light truck tires," from March 25) and operational challenges at Cooper's Albany, Ga., plant also played roles in the lowered rating. KeyBanc believes that Cooper has had production shortfalls on its most popular-sized light truck tire.
KeyBanc also reduced its full year 2008 and 2009 estimates.