Deutsche Bank Maintains Buy, $21.50 Target on Goodyear Tire & Rubber
Deutsche Bank reiterates its Buy rating and $21.50 price target on Goodyear Tire & Rubber (NYSE: GT) as the company is seen as well positioned, despite some near-term headwinds from Europe.
Deutsche Bank says, "Goodyear expects to experience a positive impact from declining raw materials, but this should only begin impacting the company's P&L in Q2'12. We estimate that raw materials have declined by ~11% since Goodyear reported Q3 results. The benefits from this could be significant, since every 1% decline should increase full year EPS estimate by $0.27. Importantly, continued industry pricing discipline implies that a large portion of this decline should benefit Goodyear's bottom line. Interestingly, Goodyear indicated that they have seen a continuation of competitor price increases (effective beginning in Q1'12); even in Europe."
GT closed at $13.58 per share on Friday.
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