| Valuation method | Value, € | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | n/a | n/a |
| Intrinsic value (DCF) | n/a | |
| Graham-Dodd Method | 12.90 | 62 |
| Graham Formula | 0.50 | -94 |
The Goodyear Tire & Rubber Company (GTR.DE) is a global leader in tire manufacturing and distribution, serving diverse markets including automotive, commercial trucking, aviation, and industrial equipment. Headquartered in Akron, Ohio, Goodyear operates under a multi-brand strategy, offering products under well-known names such as Goodyear, Cooper, Dunlop, and Kelly, alongside private-label brands. The company maintains a robust retail network with approximately 1,000 outlets, providing not only tires but also repair and maintenance services. Goodyear’s extensive distribution channels include independent dealers, regional distributors, and retailers, ensuring broad market penetration. As a key player in the Consumer Cyclical sector, Goodyear benefits from its strong brand equity, technological innovation in tire performance, and a diversified product portfolio. However, the company faces challenges from fluctuating raw material costs and competitive pressures in the global auto parts industry. With a market cap of approximately €2.27 billion, Goodyear remains a significant entity in the tire industry, leveraging its century-old legacy and operational scale.
Goodyear presents a mixed investment profile. On the positive side, the company boasts strong brand recognition, a diversified product portfolio, and a global distribution network. Its recent acquisition of Cooper Tire enhances its market share and product offerings. However, the company operates in a highly competitive and capital-intensive industry, with significant exposure to volatile raw material prices. Goodyear’s financials show modest net income of €70 million and diluted EPS of €0.24 for the period, alongside substantial total debt of €8.79 billion, which raises concerns about leverage. The lack of dividends may deter income-focused investors. While operating cash flow of €698 million is a positive, high capital expenditures (€1.19 billion) indicate ongoing reinvestment needs. Investors should weigh Goodyear’s industry positioning against its financial constraints and macroeconomic risks.
Goodyear competes in a global tire market characterized by intense rivalry, price sensitivity, and technological advancements. The company’s competitive advantages include its strong brand portfolio, extensive retail and distribution network, and innovation in tire technology, such as fuel-efficient and durable tire solutions. Goodyear’s acquisition of Cooper Tire has strengthened its position in the replacement tire market, particularly in North America. However, the company faces stiff competition from larger players like Michelin and Bridgestone, which have greater financial resources and global reach. Goodyear’s reliance on the replacement tire market (which is more stable than OEM sales) provides some resilience, but its high debt levels could limit flexibility in pricing and R&D investments. The company’s focus on sustainability and electric vehicle (EV)-compatible tires aligns with industry trends but requires continuous capital allocation. Regional competitors in Asia, such as MRF and Apollo Tyres, also pose challenges with lower-cost offerings. Goodyear’s ability to maintain margins while investing in innovation and managing debt will be critical to its long-term competitiveness.