Goodyear Stock Falls 38.8% YTD: Buy the Dip or Time to Sell?

Core Viewpoint - Goodyear Tire & Rubber Company's stock has significantly declined by 38.8% year to date, closing at $8.76, while its competitors have shown mixed performance [1][3]. Group 1: Financial Performance - Goodyear's long-term debt and finance leases increased slightly to $6,832 million as of June 30, 2024, compared to $6,831 million at the end of 2023, resulting in a long-term debt-to-capital ratio of 0.58, which is higher than the auto sector's average of 0.34 [6][9]. - The company's capital expenditure (Capex) for 2024 is projected to be around $1.25 billion, an increase from $1.05 billion in 2023, primarily due to investments in advanced tire technology and brownfield expansions [7][9]. - Sales in the commercial truck business totaled $9.11 billion in the first half of 2024, reflecting a 7.1% decline from the previous year, attributed to weak industry conditions [7][9]. Group 2: Market Conditions - The stock is currently trading below its 50-day moving average, indicating a potential downtrend or weakness in price [3]. - The Zacks Consensus Estimate for Goodyear's 2024 EPS suggests a year-over-year decline of 3.83%, with recent estimates for 2024 and 2025 also being revised downward [8][9]. Group 3: Challenges - High levels of debt are limiting Goodyear's financial flexibility, which is compounded by the need for substantial capital investments to keep up with technological advancements [6][9]. - Ongoing inflation remains a concern, with non-raw material inflation and other costs expected to be approximately $60 million higher in Q3 2024 compared to the same period last year [7][9]. - The weak performance in the commercial truck sector is likely to hinder Goodyear's top-line growth in the latter half of the year [7][9].