Cooper Tire & Rubber (CTB) Rallying As A Quality Recession Play

Cooper Tire & Rubber (NYSE: CTB) is rally over 8% today after a couple banks published bullish notes on CTB. Yesterday, KeyBanc upgraded Cooper Tire & Rubber from Hold to Buy with a $8.50 price target. Key Banc said, "We believe that from the current stock price, the downside is limited and that over the next 12 months, there is considerable upside."

And, JP Morgan followed suit today and upgraded Cooper Tire & Rubber (NYSE: CTB) from Neutral to Overweight, saying industry volumes are likely to stabilize and improve in coming quarters.

Since in this economic environment consumers are keeping their cars longer, they are likely to replace their tires more often instead of going out and purchasing a new car. Cooper Tire will continue to benefit from this recessionary trend, along with another auto company, Copart (Nasdaq: CPRT).

Copart makes a market for junked cars and sells primarily to dismantlers, rebuilders and used vehicle dealers. As people continue to hold their cars for longer periods of time, some of these cars are bound to eventually end up in Copart facilitated auctions, where Copart makes a lucrative fee for hosting auto auctions.

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Cooper Tire & Rubber Company manufactures and markets replacement tires primarily in North America and internationally.
Copart, Inc. is a provider of vehicle remarketing services in United States, Canada and United Kingdom.

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