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Goodyear Tire & Rubber rises after upgrade, increased earnings estimate, higher price target
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NEW YORK - Shares of Goodyear Tire & Rubber Co. rose Friday after an analyst upgraded the stock based on a sharp decline in the stock's value.
Goldman Sachs analyst Patrick Archambault upgraded the stock to "Buy" from "Neutral," noting shares have declined 20 percent since Oct. 28 when Goodyear issued weak guidance for the rest of the year.
"We see the sell-off, which put shares back to their July 21st levels, as an opportunity to build positions in the shares," said Archambault.
He pointed to the Akron, Ohio, company's recent U.S. price hike of as much as 6 percent in boosting his earnings estimates for next year to $1.05 per share from 95 cents per share.
Analysts polled by Thomson Reuters expect, on average, 78 cents per share.
Archambault also raised his price target to $19 from $17 on increased consumer tire demand, benefits from improved fixed cost absorption and continued cost reduction from better manufacturing flexibility afforded by the new United Steel Workers contract.
In afternoon trading, shares rose 57 cents, or 4.2 percent, to $14.31.
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