Tire Stocks Jump on Analyst Upgrades
NEW YORK (
) --
Goodyear Tire & Rubber
(GT) - Get Report
and
Cooper Tire & Rubber
(CTB) - Get Report
are surging following upgrades at
Bank of America Merrill Lynch.
Goodyear Tire shares jumped 9.3% to $11.45 in late afternoon trading after Bank of America boosted its rating on the stock to buy from underperform. The firm cited an improved valuation for its change in recommendation. Shares of Goodyear Tire have fallen about 17.9% year to date.
Volume of 11.3 million was already more than double the issue's trailing three-month daily average churn of 4.3 million.
Meanwhile, Cooper Tire & Rubber hit a new 52-week high at $24.99 Thursday. The stock was recently adding almost 4% to $24.03 as Bank of America went to buy from neutral. Its volume was strong as well with 1.5 million shares changing hands vs. a typical churn of around 760,000.
Year-to-date, shares of Cooper Tire are up about 23.8%.
Bank of America is predicting a rev-up in demand for tire replacements as the number of miles travelled on the road approaches a record high of 3 trillion miles.
In early November, Standard & Poor's lowered its view on Cooper Tire to hold from buy after calculating that the company posted adjusted third-quarter earnings per share from continuing operations of 77 cents vs. a restated 87 cents. This was below S&P's 85 cent estimate due to higher than expected operating costs. Still, S&P foresees operating improvements and selling price increases in the quarters ahead, which would offset higher commodity prices.
Just a few weeks ago, Standard & Poor's credit rating services revised its outlook for Goodyear Tire, the largest tire maker in the U.S., to stable from negative on better global tire demand.
S&P said better global consumer and commercial tire demand have boosted Goodyear's sales and profits in 2010. It expects tire demand in 2011 to continue growing gradually in North America and Europe, and faster in Asia.
S&P's rating services also believes that Goodyear will use less cash in 2010 and 2011 than previously expected thanks to better-than-expected operating performance and working capital management.
>>Search for Highest Dividends by Rate or Yield
More on Earnings Today's Top Earnings |
-- Written by Andrea Tse in New York.
>To contact the writer of this article, click here:
Andrea Tse
.
>To follow the writer on Twitter, go to
.
>To submit a news tip, send an email to:
.
Copyright 2010 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.