Goodyear (GT) is one of the most recognizable names in the global tire industry, manufacturing and selling tires for consumer vehicles, commercial trucks, aircraft, motorcycles and industrial equipment.
But a strong brand does not always make a strong stock. Goodyear has struggled for years with negative growth, inconsistent profitability, a highly leveraged balance sheet and poor stock price performance. The company continues to face soft tire demand, competitive pressure and limited financial flexibility, leaving investors with few clear bullish catalysts.
With sales and earnings under pressure, earnings downgrades and the stock down significantly across most major lookback periods, GT stands out as a challenged business in a difficult industry. Until the company can show sustained volume recovery, margin improvement, and better earnings momentum, Goodyear earns its place as today’s Bear of the Day.
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GT Stock Falls Further on Downgrades
Earnings estimates have been hit hard in recent months, pushing Goodyear to a Zacks Rank #5 (Strong Sell). Current quarter estimates have fallen deeply negative, while current year estimates are down 157% and next year estimates have dropped 27%.
The growth outlook remains challenged as well. Sales are expected to decline 3% this year before recovering just 2% next year. Meanwhile, EPS are projected to fall 157% this year into deeply negative territory before rebounding next year from depressed levels.
That kind of recovery may look dramatic on paper, but it follows a long period of shrinking revenue, weak profitability, and poor stock performance. Until earnings estimates begin moving higher in a sustained way, GT remains a difficult stock to own.
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Goodyear Stock Approaches Multi-Decade Low
The long-term chart tells the story. Goodyear shares peaked in early 1998 and have never fully recovered. While there were several rallies along the way, each recovery failed below the prior highs.
Now, with the stock trending toward multi-decade lows, the technical picture reinforces the fundamental weakness. For investors, this is not just a short-term pullback. It is a long-running downtrend that reflects years of challenged growth, inconsistent profitability, and limited confidence in the turnaround.
Image Source: TradingView
Should Investors Avoid Shares in GT?
Goodyear may eventually stabilize, but the burden of proof remains high. The company needs to show sustained volume recovery, better margins, meaningful debt reduction, and positive earnings estimate revisions before the stock becomes more attractive.
For now, the setup remains weak. GT has falling earnings estimates, negative near-term EPS expectations, poor long-term price action and limited visible catalysts. Even if the stock looks inexpensive on some valuation metrics, cheap alone is not enough when the underlying business continues to struggle.
Until the fundamentals and technical picture improve, investors may be better served looking elsewhere.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
