The Goodyear Tire & Rubber Company (GT): A Bull Case Theory

We came across a bullish thesis on The Goodyear Tire & Rubber Company on Value investing subreddit by Corpulos. In this article, we will summarize the bulls’ thesis on GT. The Goodyear Tire & Rubber Company’s share was trading at $8.42 as of September 4^th. GT’s trailing and forward P/E were 5.71 and 4.35 respectively according to Yahoo Finance.

Goodyear Tire & Rubber (GT) presents a potential turnaround opportunity centered on its “Goodyear Forward” transformation plan. The stock trades at a deeply discounted valuation, with a P/E ratio of just 5.7x and a P/B of 0.47x, reflecting market skepticism tied largely to its debt load. The company carries $8.98 billion in debt and a Debt-to-Equity ratio of 1.70, a significant headwind that inflates enterprise value despite attractive earnings multiples. The investment case hinges on whether management can deliver on its deleveraging strategy while executing a multi-billion-dollar margin expansion plan.

Goodyear has set an ambitious goal of doubling its segment operating income margin to 10% by 2025 through $1.3 billion in cost reductions and revenue initiatives. Early signs of progress are evident, with $195 million in savings achieved in Q1, but Q2 2025 results highlighted ongoing volatility, as EPS missed expectations and net sales fell 2.2% year-over-year. This uncertainty is reflected in the stock’s 1.37 beta, suggesting elevated sensitivity to market swings. Yet, if management successfully executes its transformation, the potential upside is significant, with a re-rating of both earnings and enterprise value likely.

From an investor’s perspective, current valuation already factors in considerable downside risk, while leaving open meaningful upside should the turnaround gain traction. In the worst case, Goodyear could still offer value as a defensive play in a sector positioned relatively well for a recession. In the best case, cost reductions and margin expansion could drive a sharp recovery, making the stock an attractive contrarian bet at current levels.

Previously, we covered a bullish thesis on The Goodyear Tire & Rubber Company (GT) by Unemployed Value Degen in March 2025, which highlighted efficiency struggles, seasonal free cash flow gains, and limited operational progress. The company’s stock price has depreciated approximately by 14% since our coverage. This is because execution lagged while skepticism persisted. Corpulos shares a similar view but emphasizes the “Goodyear Forward” plan with margin expansion as a catalyst.

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Disclosure: None.