On Aug 19, 2014, we issued an updated research report on
Cooper Tire & Rubber Co.
). This Zacks Rank #2 (Buy) stock's earnings per share increased to
59 cents in the second quarter of 2014 from 55 cents in the
prior-year quarter. However, the figure lagged the Zacks Consensus
Estimate of 80 cents.
Revenues of Cooper Tire improved 1% year over year to $889
million in the quarter, beating the Zacks Consensus Estimate of
After the dismissal of the merger proposal with Apollo Tyres
Ltd., Cooper Tire is focusing on improving its business operations.
As a result, its earnings have begun to improve. Cooper Tire has
also restored normal operations at its Chinese joint venture
The company develops high-performance products to cater to the
current market demand. Cooper Tire expects the improving product
mix to increase its profitability.
On Aug 7, 2014, the company announced an accelerated share
repurchase (ASR) program worth $200 million. The ASR will
significantly reduce the outstanding shares of the company, thus
having a positive impact on future earnings per share.
Cooper Tire aims to attain operating profit over 10% and net
sales of $5-$6 billion per annum in the long term. The company
plans to reduce its manufacturing costs by 14% by 2017 through
increased automation in production facilities and consolidation of
Cooper Tire also plans to maintain a sustained annual operating
profit of 8-10%. It plans to reduce the number of global product
families by 60% by 2020. This will lead to simplification of the
manufacturing process, lower costs, higher sourcing flexibility and
faster product development.
Some other automobile stocks that are worth considering include
Tesla Motors, Inc. (
), Fox Factory Holding Corp (
) and Gentherm Incorporated (
). While Tesla sports a Zacks Rank #1 (Strong Buy), Fox Factory and
Gentherm have a Zacks Rank #2.
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