Analyst Say Hold Following Cooper's CCT Deal - Tire Review Magazine

Analyst Say Hold Following Cooper’s CCT Deal

Market analysts at KeyBanc Capital Markets have issued a hold on Cooper Tire & Rubber Co. following its announcement that the company has reached a deal with CCT.

The hold is based on several factors:
•    The company is expected to post its second half financials in March, which Key “expect to fall below investor expectations.”
•    The future ownership is uncertain with many different variables that are outside Cooper’s control, “given investors’ dislike for uncertainty, it could weigh on the shares in the near term.”
•    If Cooper sells and no longer retains ownership of the plant, near-term disruptions to the tiremaker’s China growth strategy is a concern. Chengshan’s actions are unpredictable, and while the agreement might ensure future supply for Cooper’s customers, comfort levels with the commercial terms and reliability of sourcing is overshadowed by Chengshan’s and the CCT union’s actions the second half of 2013.
•    The value of the plant is not definite – “Given the fact that Chengshan sought a materially inflated valuation previously for its 35% interest, we would not rule out Chengshan attempting to get [Cooper] to overpay for the minority interest regardless of independent valuation input.”

Information courtesy of Anthony J. Deem Equity Research Associate – Automotive  KeyBanc Capital Markets Inc.

You May Also Like

Nexen Tire America details its 2024 U.S. motorsports program

Nexen Tire Motorsports drivers competed at the “Streets of Long Beach” Pro Championship event using the company’s N’Fera Sport R tire.

Nexen-Tire-America-2024-motorsports

Nexen Tire America is kicking off its 2024 U.S. motorsports program. In addition to partnering with two of last year’s Nexen Tire Motorsports drivers in Formula Drift – Federico Sceriffo and Trent Beechum – Nexen Tire said it has also added a third driver to its roster, Mike Power.

Chapel Hill Tire opens 12th location in Durham, NC

Chapel Hill Tire said the new Durham location will offer everything from routine maintenance to complex repairs.

Chapel-Hill-new-location
Hankook acquires additional stake in thermal management systems company, Hanon Systems

Hankook & Company Group said it will hold a 50.53% stake in Hanon Systems and take management rights as the largest shareholder.

Handshake agreement
PRT launches 59 new complete strut assemblies

Extending PRT’s product portfolio in North America, the new release represents nearly 12M vehicles in new coverage.

PRT-Strut
Tire Discounters partners with the Atlanta Braves for home run promotion

For every home run hit by the Braves this year in a game, Tire Discounters will give fans discounts on Goodyear/Cooper tires.

Other Posts

Michelin sponsors WWII vets’ return to Normandy for D-Day 80th anniversary

WWII vets will participate in several parades, ceremonies and celebrations during their 10-day tour of the Normandy region.

Michelin-DAL_NORMANDY
McCarthy Tire Service partners with Truckers Against Trafficking

McCarthy Tire Service has launched a company policy aimed at identifying and reporting potential human trafficking situations.

McCarthy-tire-TAT
TIA’s EV Advisory Council tours Midtronics HQ

The agenda included a council meeting, a facility tour and a demonstration led by the Midtronics EV platform team.

TIA-Midtronics-tour