Taking on analysts’ expectations and winning: The Goodyear Tire & Rubber Company (GT)

The Goodyear Tire & Rubber Company (NASDAQ: GT) stock jumped 1.92% on Friday to $12.72 against a previous-day closing price of $12.48. With 3.42 million shares changed hands, the volume of the stock remained lighter than its average volume of 4.79 million shares. During the session, the Auto Parts company that operates in wider Consumer Cyclical sector, reached to the highest price of $12.85 whereas the lowest price it dropped to was $12.58. The 52-week range on GT shows that it touched its highest point at $24.89 and its lowest point at $10.33 during that stretch. It currently has a 1-year price target of $17.47. Beta for the stock currently stands at 1.89.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of GT was up-trending over the past week, with a rise of 12.17%, but this was up by 15.01% over a month. Three-month performance dropped to -7.89% while six-month performance fell -41.22%. The stock lost -19.03% in the past year, while it has lost -40.34% so far this year. A look at the trailing 12-month EPS for GT yields 3.01 with Next year EPS estimates of 2.65. For the next quarter, that number is 0.34. This implies an EPS growth rate of 154.00% for this year and 43.50% for next year. EPS is expected to grow by 9.13% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of -9.40%.

Float and Shares Shorts:

At present, 284.00 million GT shares are outstanding with a float of 281.30 million shares on hand for trading. On Jul 14, 2022, short shares totaled 13.72 million, which was 4.86% higher than short shares on Jun 14, 2022. In addition to Mr. Richard J. Kramer as the firm’s Chairman, CEO & Pres, Mr. Darren R. Wells serves as its Exec. VP & CFO.

Institutional Ownership:

Through their ownership of 85.04% of GT’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 43.74% of GT, in contrast to 40.51% held by mutual funds. Shares owned by individuals account for 1.11%. As the largest shareholder in GT with 10.57% of the stake, BlackRock Fund Advisors holds 29,854,513 shares worth 29,854,513. A second-largest stockholder of GT, The Vanguard Group, Inc., holds 27,844,782 shares, controlling over 9.86% of the firm’s shares. AllianceBernstein LP is the third largest shareholder in GT, holding 20,958,120 shares or 7.42% stake. With a 2.94% stake in GT, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 8,312,988 shares are owned by the mutual fund manager. The iShares Core S&P Mid Cap ETF, which owns about 2.89% of GT stock, is the second-largest Mutual Fund holder. It holds 8,165,409 shares valued at 87.45 million. Vanguard Small Cap Index Fund holds 2.53% of the stake in GT, owning 7,139,614 shares worth 76.47 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for GT since 9 analysts follow the stock currently. There are 5 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 3 believe that the stock is worth HOLDING, 1 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With GT analysts setting a high price target of $28.00 and a low target of $12.00, the average target price over the next 12 months is $18.19. Based on these targets, GT could surge 120.13% to reach the target high and fall by -5.66% to reach the target low. Reaching the average price target will result in a growth of 43.0% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. GT will report FY 2022 earnings on 02/10/2023. Analysts have provided yearly estimates in a range of $2.15 being high and $1.32 being low. For GT, this leads to a yearly average estimate of $1.79. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. The Goodyear Tire & Rubber Company surprised analysts by $0.14 when it reported $0.37 EPS against a consensus estimate of $0.23. The surprise factor in the prior quarter was $0.25. Based on analyst estimates, the high estimate for the next quarter is $0.47 and the low estimate is $0.18. The average estimate for the next quarter is thus $0.36.

Dividends & Yield:

In terms of dividends, GT has a dividend of $0.5 is likely to be paid on average over the next five years. Dividend yield is another indicator that appeals to many investors, and GT currently yields $0.90. In the past year, GT’s dividend yield has been $0.90, but when looking at the stock over the past five years, its yield has been $3.27. Accordingly, GT has a current buyback yield of $0.14. This was $0.14 for the TTM, and it was $4.35 for the past five years.

Summary of Insider Activity:

Insiders traded GT stock several times over the past three months with 1 Buys and 1 Sells. In these transactions, 5,467 shares were bought while 1,660 shares were sold. The number of buy transactions has increased to 34 while that of sell transactions has risen to 37 over the past year. The total number of shares bought during that period was 995,492 while 730,393 shares were sold.

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