Analyst: Cooper Tire is on a roll

May 28, 2012

Saul Ludwig, a managing director at Northcoast Research Holdings LLC, has reinforced his company's "Buy" stock rating for Cooper Tire & Rubber Co.

The tire industry analyst has increased Cooper's stock price estimates for both 2012 (full year) and 2013 for four reasons:

1. "improving operational efficiency,"

2. 1Q market share gains in the United States,

3. expected volume increases, and

4. additional growth in China.

"Although its U.S. volume fell by 6.1% in 1Q '12, Cooper gained share, but strong volume growth in Canada and Mexico led to its North American volume falling just 2.9% in 1Q '12," he says. "We expect volume comps to be better in the remaining quarters of 2012."

Ludwig says the coming expiration of the tariff on imported Chinese consumer tires "will not have any material impact on Cooper’s profits, even as some tire prices come down a bit."

Cooper Tire & Rubber Co. reported net income of $22 million on net sales of $984 million for the first quarter ended March 31, 2012. That compared to income of $16 million on sales of $902 million for the same period last year. (To read more about the company's first-quarter financials, click here.)