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Monday, February 16, 2015
Connor Campbell - Market Analyst at Spreadex

Stock of the day 16/02/2015 – Goodyear Tire & Rubber Co

2014 was an overall positive year for the company, however less robust than it would have hoped after the rapid gains Goodyear made in 2013. The company grew from $13.09 at the start of 2013 to open 2014 at $23.73, an impressive $10 of growth that Goodyear couldn’t get near in the past 12 months. A strong fourth quarter for 2013 last February saw the stock increase to around $28; it would then spend much of the first half of the year flitting between around that level.

Goodyear Chart Feb 2015

However between September and mid-November the company saw big losses, and by the market-wide slump in mid-October was down to $18.89. Yet as the US markets surged in the final months of 2014, so too did Goodyear, culminating with a high of $28.86 at the very end of the year before opening 2015 at $28.77. It quickly beat its 2014 high by reaching $28.97 in the first week of trading; however, a 13% drop in mid-January saw share prices fall to $26.06 after the company cut its Q4 and full year guidance, and as of last Friday the stock is trading at $25.89.

The most significant piece of news coming out from Goodyear of late is the announcement that it intends to debut an online tire buying and installer program. The company will be the first major tire-maker to do so, and any elaborations on this scheme tomorrow will likely interest investors. The move to e-commerce has been slow for the motor industry so 2015 may see Goodyear act as a tester-case for the rest of the sector.

As mentioned Goodyear’s Q3 results weren’t great, as the company’s revenue slipped to $4.7 billion from the previous year’s $5 billion. The average forecast for Q4 revenue is $4.37 billion, whilst earnings per share are forecast to be $0.58. However, analysts are still bullish on the stock, giving a consensus rating of ‘buy’ due to its relative cheapness, with a target of $28.88, a few dollars above its current trading price.

Recent Posts:
Weekend Paper Roundup 16/02/2015
Morning Market Comment 16/02/2015
Evening Market Comment 13/02/2015
Stock of the day 13/02/2015 - Acacia Mining PLC
Afternoon Market Comment 13/02/2015


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