Cooper Tire’s Upbeat Outlook

Cooper Tire’s management is convinced that it can achieve a dramatic margin improvement. That’ the verdict Deutche Bank analysts gave after meeting with company’s top brass. Having said that, the report says the company is also realistic, not claiming to be able to achieve this overnight. According to the analysts’ report, the company doesn’t expect to achieve its 10 per cent target margin until after 2006, possibly 2007. In the second half of 2005, the analysts predict a “compelling trajectory” culminating in a 6-8 per cent EBIT margin in 2006. Furthermore, up to two margin points could be achieved by reducing scrap and plant inefficiencies. Pricing is likely to continue to rise, and eventually exceed raw material cost increases (potentially responsible for between 1.5 and 3 points of margin). the analysts add.