GT has been traveling higher all year (chart above), and it has the positive technical indicators to prove it. Prices have moved up in a stair-step manner with former resistance becoming new support. The 50-day moving average is above the 200-day and both have a positive slope. The On-Balance-Volume (OBV) has been rising all year -- confirming the advance.
GT has more than doubled the past three years (chart above). The indicators remain positively aligned for GT. Prices are above the rising 40-week moving average. The OBV line on this timeframe is also bullish. The MACD oscillator is bullish and above the zero line. With the recent new high in price for GT, our point and figure chart (not shown) gives us a price target in the mid-$40s.
TheStreet Ratings team rates GOODYEAR TIRE & RUBBER CO as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
We rate GOODYEAR TIRE & RUBBER CO (GT) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income, notable return on equity, attractive valuation levels and good cash flow from operations. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Powered by its strong earnings growth of 70.68% and other important driving factors, this stock has surged by 30.13% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, GT should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Auto Components industry. The net income increased by 68.3% when compared to the same quarter one year prior, rising from $161.00 million to $271.00 million.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Auto Components industry and the overall market, GOODYEAR TIRE & RUBBER CO's return on equity significantly exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has significantly increased by 85.12% to $361.00 million when compared to the same quarter last year. In addition, GOODYEAR TIRE & RUBBER CO has also vastly surpassed the industry average cash flow growth rate of -29.21%.
- You can view the full analysis from the report here: GT
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.