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Investing.com - HSBC downgraded Goodyear Tire & Rubber (NASDAQ:GT) from Buy to Hold on Wednesday, while significantly reducing its price target to $9.50 from $15.50.
The downgrade reflects HSBC’s growing concerns about Goodyear’s pricing power and ability to achieve sustained margin improvements over time. These concerns appear warranted, as InvestingPro data shows the company’s gross profit margin stands at just 18%, while facing a significant debt burden with a debt-to-equity ratio of 1.75.
HSBC had previously maintained a bullish stance on Goodyear based on expectations that stabilizing raw materials costs, cost savings initiatives, and asset sales would lead to improved earnings and drive a multiple rerating toward tier 1 peers.
The research firm also previously believed that tariffs on imported tires could accelerate Goodyear’s financial improvement process.
HSBC now believes it could take "an extended period of increasing margins and strong execution" for Goodyear to achieve a significant valuation rerating, which the firm considers "unlikely based on recent results."
In other recent news, Goodyear Tire & Rubber Company reported its second-quarter 2025 earnings, revealing an adjusted loss per share of $0.17, which was below the anticipated $0.02 profit. The company’s revenue, however, aligned with forecasts at $4.47 billion. This earnings announcement has raised concerns among investors regarding Goodyear’s performance. Additionally, CFRA has adjusted its price target for Goodyear to $13.00 from $15.00, maintaining a Strong Buy rating. The adjustment was attributed to the challenges posed by low-cost tire imports, which have been described as a "speed bump" in Goodyear’s recovery. In leadership news, Jan-Piet van Kesteren has been appointed as Managing Director EMEA & Chief Sales Officer EMEA Consumer, effective September 1. Van Kesteren will lead the consumer business across Europe, the Middle East, and Africa, reporting to CEO and President Mark Stewart. His role will focus on driving sales execution and ensuring strategic alignment in the EMEA region.
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