- Goodyear Tire & Rubber (GT) is a multinational company that will have to navigate thru the current tariff conditions as they operate roughly 80 plants across 27 countries.
- Although share price could fluctuate based on trade policy uncertainty, Goodyear’s future growth and profitability remain attractive.
- If a tariff war escalates, Goodyear Tire would face both challenges and opportunities depending on how tariffs impact raw materials, imports, and global competition.
The recent market selloff has investors looking for both safety and protection in an ongoing tariff war and a stock that might provide some upside, as well. Goodyear Tire & Rubber (GT) is a multinational company that will have to navigate thru the current tariff conditions as they operate roughly 80 plants across 27 countries.
If a tariff war escalates, Goodyear Tire would face both challenges and opportunities depending on how tariffs impact raw materials, imports, and global competition. Some of the potential positive impacts could be less competition, improved domestic sales, and a stronger market position.
If the U.S. imposes high tariffs on Chinese-made tires, domestic brands like Goodyear could gain market share as imported tires become more expensive. This was the case in 2015 when tariffs on Chinese tires helped U.S. manufacturers as there was less competition from Chinese imports.
Goodyear has U.S.-based manufacturing, which could shield it from some trade disruptions. If competitors struggle with tariffs, the company might gain an edge or improve its North American sales, as well.
The company could also increase its pricing power in key segments if competitors face higher costs or supply chain issues. Goodyear could also strengthen its premium product lines, such as smart tires and performance tires.
As far as potential negative impacts in an ongoing tariff war, Goodyear Tire could face higher raw materials costs, increased prices along with lower demand, and a possible impact on global sales.
The company relies on rubber, synthetic polymers, and steel, some of which are imported. Tariffs on these materials (especially from China or Southeast Asia) could raise production costs. Previous U.S. tariffs on Chinese tires forced Goodyear to adjust its supply chain.
Production costs could rise in an ongoing tariff war and if Goodyear passes some of these costs to customers, it could potentially reduce demand. Price-sensitive consumers that are already strapped for cash might shift to cheaper alternatives.
We mentioned earlier Goodyear operates worldwide, with manufacturing facilities in China, Europe, and Latin America. Tariffs could disrupt exports or supply chains, impacting profitability.
As far as the chart, near-term support is at $8.50 with longer-term support from mid-September at $7.50. Resistance is at $9-$9.25. The 50-day moving average was on track to clear the 200-day moving average but both have leveled out. If an uptrend resumes and this technical indicator is completed, it typically leads to higher highs.
Analyst opinions on Goodyear seem to agree shares offer value at current levels. Deutsche Bank recently upgraded the stock to Buy with a price target of $13, indicating confidence in the company’s strategic direction and financial prospects.
Overall, there are 10 analysts that cover the stock with an average target price of $12. Although share price could fluctuate based on trade policy uncertainty, Goodyear’s future growth and profitability remain attractive.
