Goodyear Tire & Rubber Stock Plunges 13.08% to 2020 Low Amid Restructuring, Job Cuts

The share price of The Goodyear Tire & Rubber (GT) fell to its lowest level since May 2020 on October 14, with an intraday decline of 3.27%. The stock has now declined for seven consecutive days, with a cumulative drop of 13.08% over the period, reflecting heightened investor concerns over the company’s operational and financial challenges.

Goodyear’s ongoing restructuring efforts have intensified scrutiny, including the elimination of 700 jobs in its Asia Pacific operations and the sale of retail stores in the region. These measures aim to cut costs amid weak demand and low rubber prices but risk short-term instability. A broader restructuring plan announced in September, involving 1,200 global job cuts, further underscores the company’s focus on cost reduction, though it raises questions about execution risks and employee morale.

Analyst sentiment has shifted cautiously, with earnings forecasts for Q3 2023 revised downward due to weak gross profit margins. While some institutions like Aequim Alternative Investments and UBS increased holdings in September, others, including Credit Suisse and Fisher Asset Management, reduced stakes, signaling divergent views on Goodyear’s recovery potential. The stock’s 52-week low of $7.40 and a price-to-sales ratio of 0.1x highlight valuation concerns, as revenue declines and high debt levels persist.

Options trading activity in early September revealed divided market expectations, with large volumes of both put and call options purchased. This volatility, coupled with activist investor interventions such as Elliott Management’s board restructuring, reflects broader uncertainty. While strategic initiatives like new leadership appointments and product launches aim to drive long-term growth, their impact remains unproven. Investors are closely watching Q3 earnings, restructuring progress, and competitive dynamics to gauge the stock’s trajectory.