JPMorgan analyst Ryan Brinkman raised the price target on Goodyear Tire & Rubber (NASDAQ: GT) to $18.00 (from $17.00) while maintaining a Overweight rating.
The analyst comments "The combination of a better than expected headline 3Q but weaker underlying demand trends that are likely to continue into 4Q leads us to lower our 2024 SOI estimate to $1,298 mn from $1,330 mn, with 2025 also moving lower, to $1,525 mn from $1,550 mn which includes ~$80 mn headwind from the upcoming sale of the OTR business (assuming year-end 2024 closing). For 4Q, we now expect SOI of $365 mn vs. $415 mn prior. We now see free cash flow (ex-restructuring payments) below breakeven in FY24 before inflecting positively in FY25. We establish our new December 2026 price target of $18, which is newly predicated upon our 2026 estimates, vs. our prior December 2024 price target of $17, which was predicated upon our prior 2025 estimates. Our lowered SOI assumptions are offset by proceeds from the pending sale of the OTR business for $0.9 bn (~$0.8 bn after-tax) at a valuation (~9x EV/EBITDA) significantly higher than GT’s current consolidated trading multiple (~5x)."
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