On Sep 27, 2013, Zacks Investment Research raised
Goodyear Tire & Rubber Company
) to Outperform from Neutral. The recommendation upgrade of this
Zacks Rank #1 (Strong Buy) stock was based on improving earnings,
higher guidance, a new capital deployment policy and its focus on
the emerging markets of Latin America, Eastern Europe and
Why the Upgrade?
Goodyear reported a 33.3% rise in earnings per share to 76
cents in the second quarter of 2013 compared with 57 cents a year
ago (all excluding special items). The reported earnings outpaced
the Zacks Consensus Estimate of 48 cents. Net income escalated
36.5% to $202.0 million from $148.0 million in the second quarter
Since then, the Zacks Consensus Estimate for Goodyear's 2013
earnings per share has increased 13% to $2.41, up 28% year over
year. Also, the estimate for 2014 earnings has surged 10% to
$2.76 per share, up 14.5% year over year.
Goodyear is trying to boost its shareholder value by
undertaking capital deployment strategies. The company has
reinstated its quarterly cash dividend, which was discontinued
since Dec 2002. The board also authorized a share repurchase
program worth $100 million. Moreover, Goodyear regularly launches
innovative products to boost sales.
Goodyear raised its operating income guidance for 2013 to $1.5
billion, which is the higher end of the previous guidance range
of $1.4-$1.5 billion. The company expects the segment's operating
income to grow 10%-15% through 2016.
Other Stocks to Consider
Other stocks that are also worth considering in the same
American Axle & Manufacturing Holdings Inc.
Fuel Systems Solutions, Inc.
). Both American Axle and Fuel Systems carry a Zacks Rank #1
(Strong Buy), while Continental AG carries a Zacks Rank #2
AMER AXLE & MFG (AXL): Free Stock Analysis
CONTL AG-SP ADR (CTTAY): Get Free Report
FUEL SYSTEM SOL (FSYS): Free Stock Analysis
GOODYEAR TIRE (GT): Free Stock Analysis
To read this article on Zacks.com click here.