Last Update 11 Dec 25

Fair value Increased 0.55%

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.

Focus on premium tire segments, operational modernization, and innovation is expected to boost margins and competitive positioning as consumer and regulatory trends evolve.
Asset sales and debt reduction initiatives aim to strengthen the balance sheet, cut financial risk, and support renewed investment in growth.
Mounting competitive pressures, trade disruptions, weak commercial demand, distribution upheaval, and rising costs threaten Goodyear's volumes, margins, and prospects for stable long-term growth.

Catalysts

About Goodyear Tire & Rubber

Develops, manufactures, distributes, and sells tires and related products and services worldwide.What are the underlying business or industry changes driving this perspective?

Goodyear is positioned to benefit from the ongoing global increase in the vehicle parc and higher vehicle miles traveled, both of which imply durable replacement tire demand; as market turbulence and inventory overhangs subside, this underpins future revenue stability and growth.
The company is actively focusing on premium and larger rim-size tire segments (18-inch and above), launching a significant number of new SKUs globally, which supports a richer product mix and potential for margin expansion as consumer preferences move upmarket.
Goodyear's investment in modernizing its manufacturing footprint, digital supply chain initiatives, and the execution of the Goodyear Forward restructuring program (including plant closures and cost reductions) are expected to deliver sustained SG&A and COGS savings, supporting improved net margins and earnings over the medium term.
The increasing regulatory and customer emphasis on sustainability and performance (including new EU/US tariffs favoring local producers and a shift toward fuel-efficient, high-tech tires) creates an opportunity for Goodyear, given its focus on innovation and capacity in USMCA/EMEA, to enhance both revenue and pricing power once market conditions stabilize.
The asset sales (OTR, Dunlop, and Chemical business) and strong progress on deleveraging are expected to yield a significantly improved balance sheet and lower interest burden, enhancing Goodyear's ability to reinvest in growth, drive earnings accretion, and reduce financial risk.

Goodyear Tire & Rubber Earnings and Revenue Growth

Goodyear Tire & Rubber Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Goodyear Tire & Rubber's revenue will decrease by 0.4% annually over the next 3 years.
Analysts assume that profit margins will shrink from 2.3% today to 2.2% in 3 years time.
Analysts expect earnings to reach $405.2 million (and earnings per share of $1.49) by about September 2028, down from $429.0 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 11.2x on those 2028 earnings, up from 5.6x today. This future PE is lower than the current PE for the US Auto Components industry at 17.3x.
Analysts expect the number of shares outstanding to grow by 0.4% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 12.32%, as per the Simply Wall St company report.

Goodyear Tire & Rubber Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Persistent and intensifying competition from low-cost Asian manufacturers and a surge in imports-despite higher tariffs-are pressuring Goodyear's replacement tire volumes and pricing, which could erode market share and compress gross margins and revenues over the long term.
Ongoing global trade disruptions and uncertainty around tariff implementation in both the U.S. and Europe are causing volatility in demand, distributor stocking patterns, and channel inventory, making it difficult for Goodyear to stabilize volumes and reliably grow revenue and earnings.
Weak demand and structural challenges in the commercial truck tire market-including recessionary-level volumes, higher input costs due to tariffs, and factory underutilization-have driven segment operating income to record lows and could persistently weigh on Goodyear's consolidated earnings and net margins.
Distribution channel disruptions, particularly the strategic exit from relationships like ATD and ongoing changes in the retail landscape (e.g., shifts to aligned distributors), may create ongoing risks to volume, revenue consistency, and could expose Goodyear to further disintermediation as direct-to-consumer models expand.
Rising annualized tariff costs (up to $350 million), inflationary pressures, and ongoing manufacturing inefficiencies-especially during plant closures and restructuring-are materially increasing Goodyear's cost base and could delay margin recovery, ultimately limiting long-term earnings growth and free cash flow generation.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $11.071 for Goodyear Tire & Rubber based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $15.0, and the most bearish reporting a price target of just $9.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $18.3 billion, earnings will come to $405.2 million, and it would be trading on a PE ratio of 11.2x, assuming you use a discount rate of 12.3%.
Given the current share price of $8.4, the analyst price target of $11.07 is 24.1% higher. Despite analysts expecting the underlying buisness to decline, they seem to believe it's more valuable than what the market thinks.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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