Cooper Analysis Positive

According to Deutsche Bank, Cooper Tire’s (CTB) management “sounded pretty optimistic on CTB’s growth prospects for 2005,” at a recent analyst conference.

Company representatives remain positive about industry pricing, reports the German news source, with Cooper rolling out new price increases of up to four per cent in March. New contracts that have recently been secured should also encourage 2.5 per cent growth, say analysts.

Management plans, to pay only a “minimal” amount of debt with proceeds from its divestiture, were also deemed “bullish” as analysts believe a larger proportion of the proceeds will be used to buy back stock. Cooper would not quantify the amount it expected to allocate towards share repurchases, however it suggested that significant buybacks are coming, in the form of additional open market purchases, a tender, or both writes Deutsche Bank. “We believe that a share buyback in the $400 to $500 million range is a reasonable assumption and a buyback of this magnitude would be viewed as a positive for the shares.”