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On Monday, BNP Paribas (OTC:BNPQY) Exane maintained a Neutral rating on Goodyear Tire & Rubber shares with a price target of $11.00. The firm’s stance comes in the wake of Goodyear’s recent sale in the chemicals sector, which is expected to have a significant impact on the company’s financial strategy.
Goodyear Tire & Rubber, listed on the (NASDAQ:GT), has entered into a long-term supply agreement as part of the chemicals business transaction. According to BNP Paribas Exane, this agreement will ensure that Goodyear continues to have exposure to tariffs, which could potentially affect the company’s costs by up to $300 million annually.
The sale is seen as a strategic move that could help Goodyear accelerate its debt reduction efforts. With a total debt of $9.036 billion and a debt-to-equity ratio of 1.83, the company has been on a path to lower its leverage and improve its balance sheet, and the recent transaction appears to align with this objective. According to InvestingPro, the company maintains an EBITDA of $1.553 billion despite these challenges.
The analyst from BNP Paribas Exane highlighted the dual benefits of the sale for Goodyear, stating, "We believe this Chemicals sale both preserves GT’s tariffs exposure (at a max annualized cost impact of -$300M) -- via the long-term supply agreement -- as well as accelerates the Co.’s de-levering journey."
Investors and market watchers will likely keep a close eye on Goodyear’s financial progress following this development, as well as the impact of the long-term supply agreement on the company’s future cost structure and tariff exposure. The maintained Neutral rating and $11.00 price target reflect the analyst’s current view of the stock’s potential performance.
In other recent news, The Goodyear Tire & Rubber Company has announced a significant transaction, agreeing to sell most of its Goodyear Chemical division to Gemspring Capital Management for approximately $650 million. This sale is part of Goodyear’s broader transformation plan and includes production facilities in Houston and Beaumont, Texas, with a long-term supply partnership established between the two entities. The transaction is expected to close by late 2025, pending regulatory approvals, and the proceeds will be used to reduce debt and invest in strategic initiatives. In another development, JPMorgan has upgraded Goodyear’s stock to an Overweight rating with a target price of $17, citing the company’s improving execution and debt reduction efforts. The firm also highlighted Goodyear’s advantageous position regarding Section 232 tariffs, which could benefit domestic tire manufacturers.
Additionally, Goodyear has appointed Jason J. Winkler, CFO of Motorola Solutions (NYSE:MSI), to its Board of Directors, effective May 15, 2025. Winkler will serve on the board’s Audit Committee and Committee on Corporate Responsibility and Compliance. In leadership changes, Grégory Boucharlat has been named senior vice president of Global Commercial, where he will lead the strategic coordination of Goodyear’s Commercial tire business worldwide. Furthermore, Goodyear has launched the Eagle F1 Asymmetric 6 tire, praised as the 2025 Test Winner by AutoBild Magazine. This premium summer tire is available in North America and is designed for ultra-high-performance vehicles, offering advanced grip, handling, and comfort features.
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