NEW YORK (TheStreet) -- Shares of Goodyear Tire & Rubber Co (GT) were slipping, down 1.02% to $31.18 in pre-market trading Wednesday, after analysts at CLSA downgraded the tire manufacturer by two notches earlier this morning.
The firm lowered its rating on shares of Goodyear Tire to "underperform" from "buy" to reflect valuation.
CLSA analysts also lowered their price target to $33 from $34, saying recent tailwinds from natural rubber and oil prices could turn, leaving it exposed to lower tire prices.
Akron, Ohio-based Goodyear Tire & Rubber Co is engaged in the development, manufacturing, distribution and sale of tires and related products and services worldwide.
Separately, 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 a few notable strengths, 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:
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen 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 539.2% when compared to the same quarter one year prior, rising from -$51.00 million to $224.00 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 83.02% to -$262.00 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 -33.00%.
- You can view the full analysis from the report here: GT Ratings Report