| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 15.40 | 75 |
| Intrinsic value (DCF) | 3.52 | -60 |
| Graham-Dodd Method | 11.50 | 31 |
| Graham Formula | 0.40 | -95 |
The Goodyear Tire & Rubber Company (LSE: 0QLL.L) is a global leader in tire manufacturing and related services, headquartered in Akron, Ohio. Founded in 1898, Goodyear designs, produces, and distributes tires for a wide range of vehicles, including automobiles, trucks, buses, aircraft, and industrial equipment under renowned brands like Goodyear, Cooper, Dunlop, and Kelly. The company operates approximately 1,000 retail outlets worldwide, offering not only tires but also automotive maintenance and repair services. Goodyear serves a diverse customer base through independent dealers, regional distributors, and retail partners. As a key player in the consumer cyclical sector, Goodyear leverages its strong brand recognition, extensive distribution network, and innovative tire technologies to maintain its competitive edge in the global auto parts industry. With a market capitalization of approximately $2.52 billion, Goodyear remains a significant force in the tire market, catering to both consumer and commercial segments.
Goodyear presents a mixed investment profile. On the positive side, the company benefits from strong brand equity, a diversified product portfolio, and a global distribution network. However, its financials reveal challenges, including a high total debt of $8.79 billion and modest net income of $70 million for the latest fiscal year. The company's beta of 1.421 indicates higher volatility compared to the broader market, which may deter risk-averse investors. Additionally, Goodyear does not currently pay dividends, which could be a drawback for income-focused investors. The tire industry is highly competitive and sensitive to raw material costs, which could pressure margins. Investors should weigh Goodyear's established market position against its financial leverage and cyclical exposure before making investment decisions.
Goodyear operates in a highly competitive global tire market, where it competes with other major manufacturers on brand strength, product innovation, and distribution reach. The company's competitive advantages include its well-known brand portfolio (Goodyear, Cooper, Dunlop), a broad product range catering to multiple vehicle segments, and a robust retail and service network. However, Goodyear faces intense competition from larger rivals with greater scale and financial resources, such as Michelin and Bridgestone. These competitors often outperform Goodyear in terms of profitability and global market share. Goodyear's focus on innovation, including eco-friendly and high-performance tires, helps differentiate its offerings. The company's extensive retail presence provides a competitive edge in aftermarket sales and services. Nevertheless, its high debt levels could limit flexibility in pricing and R&D investments compared to financially stronger competitors. Goodyear's ability to navigate raw material cost fluctuations and maintain pricing power will be critical in sustaining its competitive position.