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Investing.com - Deutsche Bank lowered its price target on Goodyear Tire & Rubber (NASDAQ:GT) to $10.00 from $11.00 on Wednesday, while maintaining a Buy rating on the stock.
The price target reduction comes after Goodyear’s stock showed a strong positive reaction on Tuesday, which Deutsche Bank attributed to investor relief that the tire market is not expected to deteriorate further into next year, particularly in the commercial vehicle segment. Despite this recent uptick, InvestingPro data shows the stock has fallen 32.7% over the past six months and 17.4% year-to-date.
Deutsche Bank noted that Goodyear’s management is executing initiatives within its control while awaiting broader market recovery, despite ongoing challenges including tariffs, emissions regulations, and fluctuating dynamics in the automotive market. The company faces significant financial headwinds, with InvestingPro analysis revealing it operates with a substantial debt burden of $9.17 billion and hasn’t been profitable over the last twelve months, posting a negative diluted EPS of -$6.01.
The bank maintained conservative estimates for Goodyear, keeping segment operating income (SOI) generally flat year-over-year while awaiting further clarity on light vehicle and commercial vehicle volumes. This cautious approach aligns with broader analyst sentiment, as three analysts have recently revised their earnings downwards, though consensus forecasts suggest the company will return to profitability this year with an EPS forecast of $0.30.
Deutsche Bank’s new $10 price target is based on a 4.5x multiple of Goodyear’s estimated 2026 EBITDA, reflecting a cautiously optimistic outlook on the company’s long-term prospects in the tire market. With current EBITDA at $1.42 billion and a market cap of $2.3 billion, InvestingPro analysis indicates the stock is currently undervalued according to its Fair Value model. Investors seeking deeper insights can access the comprehensive Pro Research Report available for Goodyear, one of 1,400+ US equities covered with detailed analysis on the platform.
In other recent news, Goodyear Tire & Rubber Co. reported its third-quarter 2025 earnings, beating analysts’ expectations with an adjusted earnings per share (EPS) of $0.28. This performance exceeded the forecasted EPS of $0.21, representing a 33.33% surprise. However, the company experienced a slight miss on revenue, reporting $4.65 billion compared to the anticipated $4.67 billion. Despite this revenue shortfall, investor sentiment remained positive. The company’s stock experienced a notable rise in after-hours trading. These developments highlight Goodyear’s ability to surpass earnings projections, even amid revenue challenges.
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