HSBC Downgrades Goodyear Tire & Rubber (GT) to Hold

HSBC analyst Wesley Brooks downgraded Goodyear Tire & Rubber (NASDAQ: GT) from Buy to Hold with a price target of $9.50 (from $15.50).

The analyst comments: "Our thesis on Goodyear has centered around our expectation that stabilizing raw materials costs, cost savings, and asset sales would lead to a sustained improvement in earnings and drive a multiple rerating towards tier 1 peers. We believed that tariffs on imported tires could accelerate this process. However, we are increasingly concerned that Goodyear does not have the pricing power to reach and sustain materially higher margins over time. The vast majority of the upside to our prior TP came from a rerating, and we now think it could take an extended period of increasing margins and strong execution to see this, which feels unlikely based on recent results."

For an analyst ratings summary and ratings history on Goodyear Tire & Rubber click here. For more ratings news on Goodyear Tire & Rubber click here.

Shares of Goodyear Tire & Rubber closed at $8.50 yesterday.

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