GT: Q3 Execution And Sector Tailwinds Will Support Balanced Upside Amid Import Headwinds

Analysts have nudged their fair value estimate for Goodyear Tire and Rubber slightly higher, to approximately $9.51 per share from about $9.46, citing resilient Q3 performance, improving growth assumptions, and sector tailwinds tempered by ongoing competitive pressure from low cost imports.

Analyst Commentary

Recent Street research reflects a generally constructive stance on Goodyear, with target prices trimmed but ratings and broader sector context remaining supportive. Analysts acknowledge both near term execution gains and structural headwinds that could cap upside if not managed carefully.

Bullish Takeaways

• Bullish analysts highlight that strong Q3 performance and signs of regained commercial traction support the view that earnings expectations had become too pessimistic, helping to underpin the updated fair value range.
• Revised estimates across the autos supply chain, supported by stronger global light vehicle production and more favorable currency and commodity trends, are seen as tailwinds that can aid Goodyear's volume recovery and margin mix over the next several quarters.
• Maintained positive ratings alongside only modest price target reductions signal confidence that management can continue to execute on cost actions, pricing, and product mix, sustaining cash generation despite macro uncertainty.
• Analysts note that Goodyear's exposure to the auto supplier ecosystem positions it to benefit if the sector remains a preferred segment within the broader autos complex, supporting a rerating closer to peers as delivery against guidance continues.

Bearish Takeaways

• Bearish analysts remain concerned that rising low cost imports will keep competitive pressure elevated, limiting Goodyear's ability to fully pass through costs and potentially constraining margin expansion in key replacement markets.
• Lowered price targets, even as ratings stay positive, reflect a more cautious view on how much multiple expansion is justified near term, given the risk that cyclical demand or pricing softness could slow earnings growth.
• There is heightened scrutiny on execution risk, with some research highlighting that Goodyear must deliver consistent volume and mix improvement to offset headwinds facing tiremakers relative to other auto suppliers.
• Compared with other favored names in the autos value chain, Goodyear is viewed as having less clear structural growth drivers, increasing the hurdle for management to demonstrate sustainable free cash flow improvement to unlock further upside.

What's in the News

• Recorded a sharp increase in goodwill and intangible asset impairment charges to $674 million for the quarter ended September 30, 2025, up from $125 million a year earlier (company filing).
• Launched the Goodyear Eagle F1 All Season, a premium ultra high performance tire aimed at luxury sedans, sports coupes and performance crossovers, combining track inspired technology with year round drivability (company announcement).
• Introduced three new all terrain tires, including the Wrangler Outbound AT, Wrangler Workhorse AT 2 and Wrangler ElectricDrive AT, targeting SUVs, light trucks, work vans and electric pickups with enhanced durability and off road capability (company announcement).
• Formed a new Global Racing organization to unify all motorsport operations, led by Xavier Fraipont as vice president, Global Racing, strengthening alignment between racing innovation and Goodyear's broader product and brand strategy (company announcement).

Valuation Changes

• Fair Value Estimate nudged slightly higher to approximately $9.51 per share from about $9.46, reflecting modestly improved assumptions while keeping overall valuation broadly stable.
• Discount Rate unchanged at 12.5%, indicating no shift in perceived risk profile or cost of capital underlying the updated model.
• Revenue Growth revised to a slightly less negative trajectory, improving from about -12.2% to roughly -11.3%, signaling expectations for a somewhat milder top line contraction.
• Net Profit Margin effectively flat at around 2.2%, with the minor numerical change viewed as immaterial to the overall profitability outlook.
• Future P/E edged up marginally to approximately 9.75x from about 9.70x, suggesting a slightly higher implied multiple on forward earnings within a still conservative range.