Goodyear Tire and Rubber Company
GT
$6.44
-4.73%
Goodyear Tire & Rubber Co manufactures and sells a variety of rubber tires under the Goodyear brand name, serving automobiles, trucks, buses, aircraft, motorcycles, mining, farm, and industrial equipment. The company operates through three regional segments: Americas; Europe, Middle East, and Africa (EMEA); and Asia Pacific, with the Americas being the largest revenue contributor. As a legacy player in the tire industry, Goodyear is currently navigating a challenging environment marked by declining revenue, significant net losses, and a stock that has fallen sharply over the past year. The investor narrative centers on cost pressures from raw materials and demand fluctuations, with recent optimism tied to lower oil prices that could reduce production costs and stimulate replacement tire demand.…
GT
Goodyear Tire and Rubber Company
$6.44
Related headlines
Investment Opinion: Should I buy GT Today?
Based on the analysis, I rate Goodyear as a Hold. The consensus recommendation is 'hold' with an average target price of $7.46, implying a modest 10.4% upside. The thesis is that the stock is cheap but faces significant operational challenges, making it a speculative investment rather than a core holding.
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GT 12-Month Price Forecast
The AI assessment is neutral with medium confidence. The stock is deeply undervalued on a sales basis, but the negative free cash flow and declining revenue suggest that the market is pricing in a high probability of continued distress. The forward PE indicates that analysts expect a return to profitability, but this is not yet visible in the trailing numbers. The stance would upgrade to bullish if the company reports positive free cash flow and revenue growth, and downgrade to bearish if the debt burden becomes unsustainable or if revenue decline accelerates.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Goodyear Tire and Rubber Company's 12-month outlook, with a consensus price target around $7.46 and implied upside of +15.8% versus the current price.
Average Target
$7.46
0 analysts
Implied Upside
+15.8%
vs. current price
Analyst Count
—
covering this stock
Price Range
$6 - $10
Analyst target range
Goodyear has coverage from 7 analysts, with a consensus recommendation of 'hold' (mean rating of 2.7). The average target price is $7.46, implying an upside of approximately +10.4% from the current price of $6.76. The distribution includes 2 buys, 4 holds, and 1 underweight, indicating a cautious stance. The low target is $6.60, near the current price, while the high target is $9.00, suggesting a wide range of outcomes. Recent actions include Deutsche Bank downgrading from Buy to Hold in May 2026, while JP Morgan maintains Overweight, reflecting mixed sentiment. The wide spread between low and high targets (from $6.60 to $9.00) signals high uncertainty about the company's turnaround prospects, with the low target pricing in continued operational challenges and the high target assuming successful cost management and demand recovery.
Bulls vs Bears: GT Investment Factors
Goodyear presents a classic value trap scenario: deep valuation discounts (PS 0.138 vs. industry 0.5) and potential upside to analyst targets (10.4%) are offset by declining revenue, high debt, and negative cash flow. The bull case hinges on lower oil prices and cost management driving a turnaround, while the bear case focuses on continued operational deterioration. Currently, the bearish evidence is stronger given the persistent revenue decline and negative free cash flow, but the low valuation provides a margin of safety. The most critical tension is whether the company can return to sustainable profitability, as the forward PE of 10.27 assumes a recovery that has not yet materialized.
Bullish
- Deep Valuation Discount: GT trades at a price-to-sales ratio of 0.138, far below the industry average of 0.5, and a price-to-book ratio of 0.78, indicating the market prices in significant distress. This creates potential upside if the company stabilizes, as even modest improvements could lead to multiple expansion.
- Analyst Target Upside: The average analyst target price of $7.46 implies a 10.4% upside from the current price of $6.76, with a high target of $9.00 suggesting 33% upside. This indicates that some analysts see value despite the challenges, and the consensus 'hold' rating reflects a balanced view.
- Lower Oil Prices Reduce Costs: Recent news highlights that lower oil prices directly reduce Goodyear's major production costs and can stimulate replacement tire demand. This could improve margins and volume, providing a catalyst for earnings recovery if sustained.
- Forward PE Suggests Profitability: The forward PE ratio of 10.27 implies the market expects a return to profitability, with estimated EPS of $1.99 for the next fiscal year. If achieved, this would represent a significant earnings recovery from the current negative trailing EPS of -$0.68.
Bearish
- Persistent Revenue Decline: Revenue fell 8.75% year-over-year in Q1 2026 to $3.881 billion, continuing a trend of declining sales. This reflects weak demand and pricing pressures, which could persist if economic conditions deteriorate.
- High Debt Burden: The debt-to-equity ratio is 2.24, indicating significant leverage. With interest expenses of $95 million in Q1 2026, the company faces substantial fixed costs that strain profitability, especially when revenues decline.
- Negative Free Cash Flow: Trailing twelve-month free cash flow is -$126 million, meaning the company is burning cash. This limits financial flexibility and could force asset sales or equity issuance, diluting shareholders.
- Weak Relative Performance: GT has underperformed the S&P 500 by 53.45% over the past year, with a 1-year price change of -31.99%. This persistent underperformance reflects negative investor sentiment and could continue if fundamentals don't improve.
GT Technical Analysis
Goodyear's stock is in a pronounced downtrend, with a 1-year price change of -31.99% and a 6-month change of -35.86%. The current price of $6.76 sits near the lower end of its 52-week range, at approximately 63.7% of the range (calculated as (6.76 - 5.43) / (10.62 - 5.43) = 0.637). This positioning near the lows suggests bearish sentiment and potential value opportunity, but also indicates persistent selling pressure.
Beta
1.12
1.12x market volatility
Max Drawdown
-51.7%
Largest decline past year
52-Week Range
$5-$11
Price range past year
Annual Return
-37.2%
Cumulative gain past year
| Period | GT Return | S&P 500 |
|---|---|---|
| 1m | -0.9% | +2.4% |
| 3m | -1.0% | +4.6% |
| 6m | -38.9% | +11.7% |
| 1y | -37.2% | +21.4% |
| ytd | -27.8% | +13.4% |
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GT Fundamental Analysis
Goodyear's revenue has been declining, with the most recent quarter (Q1 2026) showing revenue of $3.881 billion, a year-over-year decrease of -8.75%. This follows a pattern of fluctuating quarterly revenue: Q4 2025 at $4.917 billion, Q3 2025 at $4.645 billion, and Q2 2025 at $4.465 billion. The revenue trajectory indicates a deceleration, with the latest quarter missing the prior year's level, reflecting weak demand and pricing pressures in the tire market.
Quarterly Revenue
$3.9B
2026-03
Revenue YoY Growth
-8.8%
YoY Comparison
Gross Margin
17.9%
Latest Quarter
Free Cash Flow
$-126000000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is GT Overvalued?
Given that Goodyear's trailing twelve-month net income is negative (EPS of -$0.68), the price-to-sales (PS) ratio is the primary valuation metric, currently at 0.138. The forward PE ratio is 10.27, implying the market expects a return to profitability, but the negative trailing earnings make PE unusable. The PS ratio of 0.138 is significantly below the industry average of 0.5, suggesting the stock trades at a deep discount to peers, which may reflect the market's pessimism about the company's ability to sustain profitability.
PE
-1.5x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 3x~16x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
6.6x
Enterprise Value Multiple
Investment Risk Disclosure
Financial risks are substantial. Goodyear's debt-to-equity ratio of 2.24 indicates heavy leverage, and with interest expenses of $95 million in Q1 2026, the company must generate sufficient operating income to cover these costs. The negative free cash flow of -$126 million TTM means the company is burning cash, which could lead to liquidity issues if not addressed. Additionally, the net margin of -9.4% and negative EPS of -$0.68 show that the company is not profitable on a trailing basis, making it vulnerable to further losses if revenue declines continue.