logo
  Join        Login             Stock Quote

Cooper Tire & Rubber (CTB) Upgraded To 'Buy' By Deutsche Bank

 September 24, 2012 01:08 PM
 


(By Balachander) Cooper Tire & Rubber Co. (NYSE:CTB) shares were upgraded to "Buy" from "Hold" by Deutsche Bank analyst Rod Lache.

"In anticipation of expiring tariffs, we have been speaking to manufacturers, dealers, and wholesalers. Our findings were encouraging, leaving us more bullish on the outlook for both Cooper Tire and Goodyear Tire (NYSE:GT) than we had been anticipating," the analyst wrote.

Lache, who has a price target of $24 on CTB, said the impact of Chinese tariffs expiring may be more benign than he previously anticipated.

[Related -Trying To Beat The Market Is A Fool's Errand]

"Some tire price deflation is likely inevitable. Margins for tire companies would otherwise rise to unfathomable levels. We would focus on the spread between prices and raw materials rather than pricing in isolation," Lache wrote.

Raw materials used in tires have declined by 18% since April, and the analysts estimates that every 1% decline in raw material costs adds $0.26 to the EPS of Goodyear or Cooper tire.

Lache reiterated his "Buy" rating on the stock.

If we assume that Cooper tire gives up only 60% of the benefit of declining raw material costs (vs. our current estimate of 100%), there could be $0.62 EPS upside vs. our current est.

"The key risk to our investment thesis is the outlook for industry pricing, driven by unforeseen deterioration in the industry's supply/demand dynamic," Lache wrote.

[Related -Stocks End Lower Amid Fed Uncertainty; First Solar, Inc. (FSLR) Plunges]

The stock, which has been trading in the 52-week range of $9.64 to $23.40, added 4.36% to trade at $20.81 on Monday.

iOnTheMarket Premium
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageREIT Yields In A Low-Rate Environment

If you’re pondering the allure of real estate investment trusts (REITs) these days, consider two attributes read on...

article imageA Nuanced Earnings Season

What can we glean from the latest earnings read on...

article imageMost Investors Will Miss This Powerful Buy Signal on Amazon's Chart

Amazon.com (NASDAQ: AMZN) may have disappointed shareholders Friday with another earnings miss, but all I read on...

article imageIs Now The Time To Buy Oil?

Stock exchanges are not alone in seeing prices pull back lately. In at least one case, however, that is read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.