- Strategic initiatives to focus on lower-cost manufacturing and high-value added products may lead to margin expansion and earnings improvement.
- Strong balance sheet gives the Company flexibility and opportunity to take advantage of opportunities and align its operations to the market.
- Economic recovery may give boost to the business, although rising raw material prices may be a short-term drawback.
- Over time, strong competitive forces and lack of durable competitive advantage will dominate the results, causing earnings to gradually normalize to 5-6% in free cash flow yield.
- Fair value: $45-$55/share.
For further details see:
Cooper Tire & Rubber Company: Wait For A Pullback Before Considering A Buy