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Goodyear Tire & Rubber Company (GT)
NASDAQ:GT
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GoodYear Tire
(NASDAQ:GT)
50Neutral
Positive Factors
Cost Savings
The company has raised its total expected annual run rate cost savings from the initial $1.3bn to the current $1.5bn and is running ahead of schedule on its timeline.
Tariff Policy
Improved performance comes as tariff policy could benefit Goodyear, with most US demand served by domestic manufacturing and tires not included in announced tariffs.
Negative Factors
Market Competition
The tire market could see a somewhat softer environment with market share gains of cheap, low-cost competitors being a prevalent theme.
Raw Material Costs
Volume and price mix remained headwinds, with further challenges caused by higher raw material costs.
GoodYear Tire (GT) vs. S&P 500 (SPY)
Market Cap
$2.58B
Dividend YieldN/A
Average Volume (3M)6.91M
Price to Earnings (P/E)40.1
Beta (1Y)1.10
Revenue Growth-5.92%
EPS GrowthN/A
CountryUS
Employees68,000
SectorConsumer Cyclical
Sector Strength62
IndustryAuto - Parts
Share Statistics
EPS (TTM)0.24
Shares Outstanding285,114,500
10 Day Avg. Volume10,114,382
30 Day Avg. Volume6,910,506
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.14
Price to Cash Flow (P/CF)0.50
P/FCF Ratio0.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$12.05Price Target Upside24.61% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
GoodYear Tire Business Overview & Revenue Model
Company DescriptionThe Goodyear Tire & Rubber Company, together with its subsidiaries, develops, manufactures, distributes, and sells tires and related products and services worldwide. It offers various lines of tires for automobiles, trucks, buses, aircraft, motorcycles, earthmoving equipment, and mining and industrial equipment under the Goodyear, Cooper, Dunlop, Kelly, Debica, Sava, Fulda, Mastercraft, Roadmaster, and various other house brands, as well as under the private-label brands. The company also retreads truck, aviation, and off-the-road tires; manufactures and sells tread rubber and other tire retreading materials; sells chemical and natural rubber products; and provides automotive and commercial truck maintenance and repair services, and miscellaneous other products and services. It operates approximately 1,000 retail outlets, which offer products for retail sale, and provides repair and other services. The company sells its products worldwide through a network of independent dealers, regional distributors, retail outlets, and retailers. The Goodyear Tire & Rubber Company was incorporated in 1898 and is headquartered in Akron, Ohio.
How the Company Makes MoneyGoodyear Tire & Rubber Company generates revenue primarily through the design, manufacture, distribution, and sale of tires and related products. Its key revenue streams include sales of replacement tires to consumers and original equipment tires to automotive manufacturers. The company capitalizes on its vast network of retail outlets, distribution centers, and partnerships with automotive service providers to maximize market reach. Additionally, Goodyear benefits from strategic alliances and joint ventures, which enhance its global distribution capabilities and technological advancements. The company's revenue is also influenced by factors such as raw material costs, global economic conditions, and regulatory requirements in the automotive industry.
GoodYear Tire Financial Statement Overview
Summary
GoodYear Tire is facing significant financial challenges with revenue and profit volatility. Despite improvements in operational efficiency, profitability and cash management remain major concerns. The company needs to stabilize its financial position to achieve consistent growth.Income Statement
GoodYear Tire has faced challenges in maintaining consistent revenue growth, with a significant decline from 2020 to 2023. While revenue decreased by 5.9% from 2023 to 2024, the gross profit margin improved dramatically in 2024 due to cost management efforts. However, the net profit margin remained low, indicating persistent profitability challenges. The EBIT margin improved in 2024, suggesting better operational efficiency, but the absence of positive EBITDA in 2024 is concerning.45
Neutral
Balance Sheet
The company has a moderate debt-to-equity ratio, reflecting a balanced capital structure. However, the equity ratio has shown some volatility, indicating fluctuating financial stability. Return on equity has been inconsistent, with a positive turn in 2024, but overall performance has been unstable.55
Neutral
Cash Flow
Cash flow management is a concern, with negative free cash flow in recent years. The operating cash flow to net income ratio in 2024 was positive, showing some operational cash generation capacity. Still, the free cash flow to net income ratio highlights cash flow constraints and the need for better capital expenditure management.35
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 18.88B | 20.07B | 20.80B | 17.48B | 12.32B | Gross Profit |
| 18.88B | 3.51B | 3.85B | 3.79B | 1.98B | EBIT |
| 16.10B | 73.00M | 883.00M | 993.00M | -327.00M | EBITDA |
| 1.73B | 856.00M | 1.85B | 1.82B | 69.00M | Net Income Common Stockholders |
| 60.00M | -689.00M | 202.00M | 764.00M | -1.25B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 810.00M | 902.00M | 1.23B | 1.09B | 1.54B | Total Assets |
| 20.96B | 21.58B | 22.43B | 21.40B | 16.51B | Total Debt |
| 8.79B | 8.65B | 8.91B | 8.42B | 6.87B | Net Debt |
| 7.98B | 7.75B | 7.68B | 7.33B | 5.33B | Total Liabilities |
| 16.06B | 16.75B | 16.96B | 16.22B | 13.25B | Stockholders Equity |
| 4.91B | 4.67B | 5.30B | 5.00B | 3.08B |
| Cash Flow | Free Cash Flow | |||
| -490.00M | -18.00M | -540.00M | 81.00M | 468.00M | Operating Cash Flow |
| 698.00M | 1.03B | 521.00M | 1.06B | 1.11B | Investing Cash Flow |
| -1.00B | -1.03B | -914.00M | -2.79B | -667.00M | Financing Cash Flow |
| 225.00M | -333.00M | 575.00M | 1.31B | 203.00M |
GoodYear Tire Technical Analysis
Positive
9.67
Price Trends
9.19
Positive
9.31
Positive
9.27
Positive
Market Momentum
-0.04
Positive
46.27
Neutral
36.56
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GT, the sentiment is Positive. The current price of 9.67 is above the 20-day moving average (MA) of 9.24, above the 50-day MA of 9.19, and above the 200-day MA of 9.27, indicating a bullish trend. The MACD of -0.04 indicates Positive momentum. The RSI at 46.27 is Neutral, neither overbought nor oversold. The STOCH value of 36.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GT.
GoodYear Tire Risk Analysis
GoodYear Tire disclosed 27 risk factors in its most recent earnings report. GoodYear Tire reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
GoodYear Tire Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $7.58B | 10.67 | 50.69% | 1.15% | 6.26% | 12.62% | |
75 Outperform | $3.48B | 18.20 | 15.44% | ― | 4.11% | 50.07% | |
64 Neutral | $4.09B | 8.51 | 10.81% | 4.04% | -0.70% | -7.27% | |
62 Neutral | $5.91B | 17.88 | 6.46% | 1.71% | -11.10% | -46.32% | |
59 Neutral | $11.38B | 10.18 | -0.84% | 4.04% | 1.25% | -16.04% | |
57 Neutral | $1.55B | ― | -3.92% | 3.76% | -2.57% | -248.28% | |
50 Neutral | $2.58B | 40.07 | 1.49% | ― | -5.92% | ― |
* Consumer Cyclical Sector Average
Performance Comparison
GT
GoodYear Tire
9.67
-2.46
-20.28%
ALSN
Allison Transmission Holdings
88.82
8.75
10.93%
BWA
BorgWarner
26.19
-6.50
-19.88%
DAN
Dana Holding
10.79
-0.72
-6.26%
DORM
Dorman Products
111.86
22.10
24.62%
LEA
Lear
77.37
-51.22
-39.83%
GoodYear Tire Earnings Call Summary
Earnings Call Date: Feb 13, 2025 | % Change Since: 18.36% | Next Earnings Date: May 2, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong free cash flow and successful execution of the Goodyear Forward transformation plan, including strategic divestitures and cost savings. However, challenges such as declining unit volumes, rising raw material costs, and the impact of low-end imports remain concerns. Overall, the highlights and lowlights are balanced.Highlights
Strong Free Cash Flow
Goodyear generated over $1 billion in free cash flow during the fourth quarter, driven by strong working capital inflows.
Significant Progress with Goodyear Forward
The company executed nearly $500 million of transformation benefits, contributing to five consecutive quarters of margin expansion.
Successful Divestitures
Completed the divestiture of the OTR business and announced the agreement to sell the Dunlop brand, reinforcing focus on strategic growth.
Cost Savings and Debt Reduction
Net debt was reduced to $6.1 billion with plans to further reduce leverage using proceeds from divestitures, expected to save $70 million in annual interest expense.
Improved Segment Operating Income
Segment operating income grew by $350 million over $200 million, excluding insurance recoveries, marking the first income growth since 2015.
Lowlights
Decline in Unit Volume
Fourth quarter sales were down 3%, driven by a 4% decline in unit volume attributed to lower consumer replacement demand and increased low-end imports.
Raw Material Cost Increases
Net price/mix was unfavorable due to increases in raw material costs, impacting segment operating income negatively.
Challenges with Low-End Imports
Growth in low-end tire imports impacted consumer replacement volumes in the U.S., Europe, and Brazil, driven by channel stocking and tariff avoidance.
Potential Tariff Impacts
Uncertain impacts of potential tariffs on Canadian and Mexican supply pose a risk to cost management in 2025.
Company Guidance
During Goodyear's Fourth Quarter 2024 earnings call, the company reported a segment operating income of $385 million, achieving a margin of 7.8%, and highlighted $1 billion in free cash flow for the quarter. Over the course of the year, they generated $750 million in savings from their Goodyear Forward plan, contributing to a full-year increase in segment operating income of $350 million, excluding insurance recoveries. The company successfully reduced net leverage to 3x and announced strategic divestitures, including the sale of their OTR business and an agreement to sell the Dunlop brand. Looking ahead, they anticipate $750 million in transformation benefits in 2025, aiming for a 10% SOI margin in Q4, with global unit volumes expected to decline 2-3% in Q1.GoodYear Tire Corporate Events
Executive/Board Changes
Goodyear Tire’s EMEA President Takes Leave of Absence
Neutral
Apr 7, 2025
On April 4, 2025, Christopher R. Delaney, President of the EMEA region for Goodyear Tire & Rubber Company, took a leave of absence. During his absence, Christina L. Zamarro, the company’s Executive Vice President and Chief Financial Officer, will temporarily oversee the EMEA business unit in addition to her current responsibilities.
Spark’s Take on GT Stock
According to Spark, TipRanks’ AI Analyst, GT is a Neutral.
Goodyear Tire’s overall stock score reflects a challenging financial landscape marked by revenue volatility and cash flow constraints. While there are positive strides in operational efficiency and strategic initiatives, the company’s high valuation and mixed technical indicators suggest caution. The balanced sentiment in the recent earnings call highlights both progress and ongoing challenges, contributing to a moderate stock score.
To see Spark’s full report on GT stock, click here.
Executive/Board Changes
Goodyear Tire Increases Equity Grant for Directors
Neutral
Feb 27, 2025
On February 25, 2025, Goodyear’s Board of Directors approved amendments to the Outside Directors’ Equity Participation Plan, increasing the annual equity grant from $160,000 to $180,000 and introducing an elective deferral provision for stock units. These changes, effective from April 2025, allow directors to defer receipt of stock units, which will be converted to common stock upon leaving the Board, potentially impacting director compensation and company governance.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.