Goodyear To Perform Well (GT)
Goodyear Tire & Rubber Co. (NYSE: GT) is expected to perform well in 2010. According to a recent report released by NorthCoast Research, the firm is expected to earn an EBITDA of $1,532 million for 2010, while for year 2011, its EBITDA is likely to hover around the $1,763 million mark. The firm’s EV/EBITDA is expected to be at 4.5X. Goodyear (GT) draws 43% of its revenue from North America and 36% from Europe. Latin America and Asia are responsible for 11% and 10% market share respectively.
The report has further stated that the company completed its $2.5 billion cost reduction program in 2009. Goodyear launched a new 3-year cost reduction plan in the beginning of the current year. The program will help the company save $1 billion in costs. NorthCoast has given a price target of $19 for the company. The prices is based on an EV/EBITDA multiple of 6.3X of Year 2010 estimates.
