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Shares of Goodyear Tire & Rubber Co. fell more than 10% on Tuesday, on track for their worst finish in nearly a month, as Wall Street worried about lower volumes for the tire maker.
The stock fell nearly 15% in midday trading Tuesday, on pace for its lowest close since Oct. 3 and its largest one-day percent decline since Feb. 11, when it fell 27%.
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late Monday reported third-quarter earnings below analysts’ expectations and said “challenges” with inflation and a stronger dollar remain. Tire-sales volume was down 3%.
Garrett Nelson at CFRA lowered his price target on Goodyear shares to $16 from $18 and tweaked his rating on the shares to buy from CFRA’s “strong buy” classification. Goodyear’s “risk/reward at current levels [are] favorable,” Nelson said in his note.
In a letter to investors, Goodyear executives said they were seeing a trend of lower sales growth for replacement tires, which command higher margins.
That was partly offset by a continued recovery for original-equipment manufacturer, or OEM, tires, “but we note that Goodyear’s own volume performance also lagged the industry’s” in the quarter, analysts at Deutsche Bank said in their note.
Shares of Goodyear have lost 49% so far this year, compared with a drop of 19% for the S&P 500 index.
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