With President Trump’s “Liberation Day” tariffs now in effect, investors and analysts are sorting through the wreckage to identify the winners and losers of the latest trade shake-up.
Trump surprised markets by sparing semiconductors and pharmaceuticals — at least for now — providing a reprieve that buoyed those sectors.
But Thursday's biggest midday gainer wasn’t a buzzy tech or pharma stock. It was Goodyear Tire & Rubber (GT), a name that rarely makes headlines.
Shares of the American tire manufacturer jumped more than 14% in midday trading and closed up 11.7% — one of the strongest-performing consumer stocks yesterday.
The rally came after Deutsche Bank upgraded GT, pointing out that Goodyear is well-positioned to weather Trump’s 25% tariff on auto imports. That’s because most of Goodyear’s revenue comes from domestic manufacturers.
And while the tariff list includes a range of auto parts, tires are exempt — at least for now.
Deutsche Bank analyst Edison Yu sees more upside for GT. “Any negative impact on new vehicle sales should be tempered by a significantly higher mix of better-margin replacement tires,” Yu wrote in a note to clients.
“All in, there remain risks on execution, but we believe the company is well situated operationally to outperform with current valuation at trough levels.”
Yu upgraded the stock to a buy from hold and set a price target of $13.
Activist pressure sparked a turnaround plan
Yu’s bullish stance isn’t just about Goodyear escaping tariffs. He also points to the company’s “steady progress in its cost-cutting program,” as reported by Bloomberg.
Goodyear launched a two-year transformation plan in 2023 after activist investor Elliott Investment Management took a stake and pushed for sweeping changes.
The plan — dubbed "Goodyear Forward" — targets $1.3 billion in top-line and cost reductions by the end of 2025. It also aims to double Goodyear’s segment operating margin to 10% by the end of 2024.
To help meet those goals, Goodyear is seeking over $2 billion in gross proceeds through portfolio optimization. It also plans to cut its debt by $1.5 billion, net of about $1.1 billion in restructuring costs.
“Our transformation plan represents a clear path to create a more profitable and focused Goodyear,” CEO and President Richard J. Kramer said when the initiative was announced.
Yu remains confident that the company can hit its targets.
“Our conversations with the company have given further confidence that it has the necessary traction to achieve its targeted $1.5 billion in cost savings and margin improvement by the end of 2026,” he added.
Goodyear now has five buy ratings and five holds — with no sell recommendations, according to Bloomberg.
Last month, TD Cowen initiated coverage with a buy rating and a $14 price target, also citing the company’s transformation plan as a key driver.
GT closed just above $10 on Thursday.
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