A Fresh Valuation Look at Goodyear (GT) After Major Chemical Business Sale and Transformation Moves

Goodyear Tire & Rubber (GT) has just wrapped up the sale of most of its Chemical business, marking a major step in its Goodyear Forward transformation program. The deal is designed to sharpen Goodyear’s focus on its core strengths and increase its financial flexibility.

See our latest analysis for Goodyear Tire & Rubber.

The Chemical business sale follows a challenging earnings season for Goodyear, which reported a much wider net loss along with higher impairment charges last quarter. Although recent weeks saw a rebound, with a 13.1% 1-month share price return, momentum has not yet reversed the longer-term trend, as total shareholder return remains negative over the past year and beyond. Investors are watching closely to see if this strategic shift can help the company turn the corner.

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With Goodyear’s transformation efforts underway and shares still trading well below analyst price targets, the question for investors is whether the stock now offers genuine upside or if the market has already taken any recovery potential into account.

Most Popular Narrative: 20.8% Undervalued

According to the most widely followed valuation narrative, Goodyear Tire & Rubber’s fair value is pegged well above its last close price, suggesting the stock may have untapped upside if expected progress materializes. This narrative sets the stage for a closer look at the strategic rationale underpinning Goodyear’s current valuation.

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. These initiatives are intended to support improved net margins and earnings over the medium term.

Read the complete narrative.

What numbers drive this potential re-rating? The key is in how much operational improvement and turnaround the narrative is willing to price in, especially around margins and sustainable earnings. Could these projections really change the game for Goodyear’s financial profile? Only a look under the hood of the full narrative reveals the detail.

Result: Fair Value of $9.59 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent competition from low-cost imports and ongoing commercial market weakness could undermine Goodyear’s margin and turnaround story if these headwinds intensify.

Find out about the key risks to this Goodyear Tire & Rubber narrative.

Build Your Own Goodyear Tire & Rubber Narrative

For those who want to draw their own conclusions or challenge the consensus, you can quickly analyze the numbers and craft an independent perspective in minutes, Do it your way

A great starting point for your Goodyear Tire & Rubber research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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