Goodyear Tire & Rubber Gets JPMorgan Boost As Restructuring, Tariffs Align

JPMorgan analyst Ryan Brinkman moved Goodyear Tire & Rubber GT from no rating to Overweight and a price forecast of $17.

The analyst says that the decision reflects improved execution, ongoing debt reduction, sharper operational focus and anticipated benefits from newly implemented Section 232 automotive and ”reciprocal” tariffs.

These ”reciprocal” tariffs are expected to favor domestic tire producers, particularly Goodyear, which sources only 12% of its U.S. tire sales from affected countries, compared to over 50% for the broader industry, adds the analyst.

Also Read: As Trump Tariffs Rippled Through The Markets, Goodyear Tire And These Stocks Defied The Downturn — Here’s Why

The company is actively advancing its "Goodyear Forward" strategy, introduced in November 2023, with a primary objective of improving operating margins to align more closely with industry peers, says the analyst.

Brinkman expects Goodyear's enhanced and expedited Forward profit improvement efforts, largely driven by a cost-saving restructuring initiative, to continue boosting earnings.

The analyst notes that this strategy includes a mix of aggressive cost-cutting measures and go-to-market initiatives aimed at boosting profitability, targeting a total annualized benefit of $1.3 billion by the end of the fourth quarter of 2025.

These stronger earnings, coupled with lower-than-anticipated restructuring expenses, are projected to contribute to the company's debt reduction initiative, adds the analyst.

In particular, the analyst anticipates net debt leverage to decrease significantly to around 2.8x by the end of 2025.

The analyst further writes that under the leadership of new CEO Mark Stewart, Goodyear appears to be operating with increased urgency, confidence and determination.

The analyst estimates that the company is on track to nearly double its Segment Operating Income margin, increasing from 4.8% in 2023 to an annualized rate of approximately 10% by the end of the fourth quarter of 2025.

GT Price Action: Goodyear Tire & Rubber shares are up 6.24% at $11.16 at publication on Thursday.

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Photo: Courtesy Goodyear