Analysts at Deutsche Bank reiterate Buy rating on the shares of Goodyear Tire & Rubber Co. (NYSE: GT) with a price target of $21.50. They state that Goodyear Tire & Rubber may experience some intermediate term weaknesses over the next quarter or two due to weaknesses in Europe and South America.
DB analysts state that their overall takeaway was that Goodyear Tire & Rubber is positioned well for outperformance versus expectations in fiscal 2012. They expect the company may experience a positive impact from declining raw materials, but this should only begin impacting the company profit and loss in second quarter of fiscal 2012. They estimate that raw materials have declined by 11 percent since the company reported its third quarter results, and believes that the benefits from this could be significant, since every 1 percent decline should increase full year earnings per share estimate by $0.27. They add that continued industry pricing discipline implies that a large portion of this decline should benefit the company's bottom line. Analysts comment that Goodyear indicated that they have seen a continuation of competitor price increases even in Europe. The company also acknowledged the recent declines in Brazilian commercial vehicle replacement volumes, but analysts' believe that these have been somewhat magnified by dealer inventory destocking.
Goodyear Tire & Rubber engages in the development, manufacture, distribution, and sale of tires, and related products and services to consumer and commercial customers worldwide. It has a market capitalization of $3.26 billion with a P/E ratio of 24.72.
Shares of Goodyear Tire & Rubber were down 2.06 percent, or $0.28, to trade at $13.30.