● AI Equity Research · Consumer Cyclical

The Goodyear Tire & Rubber Comp (GT)

AI stock analysis · Auto Parts · Last analyzed Aug 19, 2026

Compass Score

3.0/5

Call

Hold

Price

$5.93

AI Target

$7.46 +25.8%

AI Analyst Summary

Goodyear is a deep-value turnaround candidate trading at a forward P/E of 10.8x with a PEG of 0.43, pricing in very little credit for a potential earnings recovery that analysts project over the next 12–18 months. The core bull thesis rests on margin improvement through cost restructuring, volume recovery in replacement tire demand, and the benefits of its ongoing portfolio optimization (including the Dunlop brand divestiture). The key risk is execution — revenue is contracting at -4.8% YoY, the company remains loss-making on a trailing basis, and a prolonged weak auto market or raw material cost spike could delay the recovery timeline significantly.

Catalysts

Earnings recovery confirmation: A return to positive net income in an upcoming quarterly report would be a significant re-rating catalyst, validating the 10.8x forward P/E thesis.
Portfolio optimization proceeds: Completion and capital deployment from the Dunlop brand and non-core asset divestitures could reduce debt and improve the balance sheet profile materially.
Replacement tire demand rebound: Any acceleration in consumer replacement tire volumes, driven by aging vehicle fleets and stabilizing consumer spending, could reverse the -4.8% revenue decline trend in H2.

Fundamentals

Pe N/A (loss-making / trailing P/E unavailable); Forward P/E: 10.8x · 2.0/5

No trailing P/E available due to recent losses. Forward P/E of 10.8x is modest for the sector, but the lack of current profitability limits conviction. Recovery to profitability is a prerequisite for this to become a true valuation catalyst.

Peg PEG: 0.43 · 5.0/5

PEG of 0.43 is well below 1.0, signaling the stock is materially undervalued relative to its forward growth expectations. This is a strong positive signal if earnings recovery materializes as projected.

Analyst Rating Hold consensus (2.7) · 3.0/5

Consensus of 2.7 sits in the Hold range with 3 Buys, 6 Holds, and 1 Sell across 7 analysts. Sentiment is cautious — analysts acknowledge recovery potential but are awaiting firmer execution before upgrading. Capped at 3 given fewer than 5 Buy-side advocates.

Earnings Trend Earnings growth N/A; Revenue down -4.8% YoY · 2.0/5

Revenue is contracting at -4.8% YoY and trailing earnings are negative, leaving no positive EPS growth trend to score. While forward estimates imply a recovery, current fundamentals show a business under meaningful pressure. Scores below average until growth turns positive.

Price Target Beat 3 of 4 quarters beat (limited history) · 3.0/5

Beating in 3 of the last 4 quarters is modestly encouraging, but only 4 quarters of data are available, limiting the full 8-quarter assessment. Scored at 3 per guidelines for insufficient history, with a slight positive lean from recent beat consistency.

Management Mixed execution · 3.0/5

Management shows some ability to beat near-term EPS estimates (3 of 4 quarters), but revenue contraction and ongoing losses signal strategic and operational headwinds. Capital allocation and turnaround credibility remain to be proven. Scored conservatively given limited visibility.

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