| Valuation method | Value, CHF | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 17.70 | 97 |
| Intrinsic value (DCF) | 3.60 | -60 |
| Graham-Dodd Method | 12.20 | 36 |
| Graham Formula | 0.50 | -94 |
The Goodyear Tire & Rubber Company (GT.SW) is a global leader in tire manufacturing and related services, operating in the Auto - Parts sector under the Consumer Cyclical industry. Headquartered in Akron, Ohio, and listed on the Swiss Exchange (SIX), Goodyear designs, manufactures, and distributes a diverse range of tires for automobiles, trucks, buses, aircraft, and industrial equipment under renowned brands like Goodyear, Cooper, Dunlop, and Kelly. The company also provides retreading services, rubber products, and automotive maintenance solutions through its network of approximately 1,000 retail outlets and independent dealers worldwide. With a legacy dating back to 1898, Goodyear leverages its strong brand equity and extensive distribution network to serve global markets. Despite industry challenges like raw material volatility and competitive pressures, Goodyear remains a key player in the tire industry, focusing on innovation, sustainability, and operational efficiency to maintain its market position.
Goodyear Tire & Rubber presents a mixed investment profile. The company benefits from strong brand recognition, a diversified product portfolio, and a global distribution network. However, its financials reveal challenges, including a modest net income of $70 million (CHF) and high total debt of $8.79 billion (CHF), which may concern risk-averse investors. The lack of dividends and a beta of 1.42 indicate higher volatility compared to the market. Positive operating cash flow of $698 million (CHF) is offset by significant capital expenditures ($1.19 billion CHF), reflecting ongoing investments in capacity and innovation. Investors should weigh Goodyear's industry leadership against macroeconomic risks, such as raw material costs and competitive pressures from low-cost manufacturers. The stock may appeal to those bullish on automotive sector recovery but requires careful monitoring of debt levels and margin improvements.
Goodyear competes in a highly fragmented and competitive global tire market, where brand loyalty, technological innovation, and cost efficiency are critical. The company's competitive advantages include its strong brand portfolio (Goodyear, Cooper, Dunlop), extensive retail and distribution network, and focus on high-performance and specialty tires. However, it faces intense competition from both premium rivals like Michelin and cost leaders like Bridgestone. Goodyear's reliance on the replacement tire market (less cyclical than OEM) provides stability but exposes it to pricing pressures. Its vertical integration in retreading and services adds value but requires significant capital. The company’s high debt load limits financial flexibility compared to peers with stronger balance sheets. In emerging markets, local players like MRF and Apollo Tyres challenge Goodyear with lower-cost alternatives. To maintain competitiveness, Goodyear must continue investing in R&D (e.g., sustainable tires) and optimize its manufacturing footprint to balance cost and quality. Its partnership strategy (e.g., Cooper acquisition) helps expand market share but integration risks persist.