GT - Embedded Expectations Analysis - 2019 09 03
The Goodyear Tire & Rubber Company (GT:USA) currently trades below recent averages relative to UAFRS-based (Uniform) Assets, with a 0.6x Uniform P/B, implying bearish expectations for the firm. Management may be concerned about sustaining margins, their market share, and costs.Specifically, management is confident they have seen negative profitability impacts from selling through channels with higher distribution costs, and they may be concerned about further reductions in operating income. Moreover, they may be exaggerating the brand loyalty their customers have towards Goodyear tires, and they may lack confidence in their ability to improve volumes and margins. Furthermore, they may be concerned about ongoing macroeconomic headwinds impacting their business, and they may have concerns about their ability to maintain their market share. Finally, they may be concerned about rising raw material costs and continued weakness in Asian markets.
Goodyear Tire & Rubber develops, manufactures, distributes and sells tires and related products and services worldwide. The company manufactures and markets various lines of rubber tires for: automobiles, trucks, buses, aircraft, motorcycles, earthmoving and mining equipment, farm implements, industrial equipment, and various other applications. The company manufactures and sells tires under the Goodyear, Dunlop, Kelly, Debica, Sava and Fulda brands and various other Goodyear owned house brands, and the private-label brands of certain customers. The company operates its business through three operating segments representing its regional tire businesses: Americas; Europe, Middle East and Africa; and Asia Pacific.
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