Analysts: Cooper Stock Worth ‘A Second Look’

Shares of Cooper Tire & Rubber Co. hit a 52-week high on 2 March, despite reporting a more losses in its fourth quarter results. Cooper shares rose $1.18, or 7 per cent, to $18.24 in midday trading on the New York Stock Exchange. They had peaked at $18.45 earlier in the session.

Cooper Tire reported a fourth-quarter operating profit of 33 cents a share, which was much stronger than the 2 cents Himanshu Patel of J.P. Morgan Securities Inc. expected, he wrote in a research note. Patel noted that Cooper Tire’s North American sales were up 12 per cent last quarter, despite slow shipment figures, which helped drive the clean earnings.

KeyBanc analyst Saul H. Ludwig kept his “Buy” rating and increased his earnings estimates for the company noting faster-than-expected benefits for Cooper’s cost-cutting efforts. “Following seven consecutive quarters of losses, Cooper turned the corner with a vengeance in fourth quarter 2006 by topping even the highest estimate by a wide margin,” Ludwig wrote in a note to investors. “We believe the profit improvement plan is working.”

In addition, Ludwig said Cooper could build on its 2006 market share gains in 2007 and is taking on new business at higher margins. He said the company also should benefit from a continued drop in raw material prices coupled with higher pricing of its products.