Goldman Sachs, Keybanc Downgrade Goodyear
Market analysts at Keybanc and Goldman Sachs have downgraded their stock ratings for Akron, Ohio-based Goodyear Tire to “underweight” and “sell” respectively. Goldman Sachs reduced the stock from “Neutral” to “Sell” noting the company’s fortunes are linked to the success or otherwise of the Detroit carmakers. Goldman predicted analysts’ estimates for 2009 would also have to be cut. Meanwhile a Keybanc analysts listed the headwinds Goodyear is facing: “Lower volume globally, unabsorbed overheads, raw material costs that will substantially exceed price/mix in the first half of 2009, but should turn positive in the second half, significantly higher pension costs; foreign exchange working against the company, and disruptions associated with capacity reductions are all challenges Goodyear Tire faces this year.” The bank revised its earning per share estimate to a loss of $0.50. “For 2010 our initial estimate is a profit of $0.85. We have low confidence in both estimates and both exclude what will be very large restructuring/plant closing and severance expenses,” Keybanc concluded, noting that these estimates are likely to change during the course of the year.
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