Investment Rating - The report provides various investment ratings for Japanese automotive companies, including "Overweight" for Toyota Motor, Suzuki Motor, Yamaha Motor, Isuzu Motors, Denso, Aisin, and Nifco, while "Underweight" is assigned to Nissan Motor and SUBARU [5]. Core Insights - The global auto industry is expected to normalize after overcoming COVID-19 and supply chain issues, with a projected growth rate of approximately 2% CAGR from 2024 [20]. - The report highlights the complexity of the Toyota Group structure, indicating increasing cross-shareholdings among its subsidiaries [7]. - Tariff impacts are noted to be minor in the tire sector, but the competitive environment remains challenging [4]. Coverage Universe & Valuation - Nissan Motor: Underweight, Price: ¥355, Target Price: ¥320, Market Cap: ¥1,318.5 billion, FY24E P/E: NM, ROE: -1.2% [5] - Toyota Motor: Overweight, Price: ¥2,624, Target Price: ¥3,600, Market Cap: ¥41,438.1 billion, FY24E P/E: 6.9, ROE: 13.4% [5] - Mitsubishi Motors: Neutral, Price: ¥432, Target Price: ¥360, Market Cap: ¥631.1 billion, FY24E P/E: 15.4, ROE: 3.7% [5] - Mazda Motor: Neutral, Price: ¥894, Target Price: ¥1,000, Market Cap: ¥564.8 billion, FY24E P/E: 4.5, ROE: 7.3% [5] - Honda Motor: Neutral, Price: ¥1,421, Target Price: ¥1,500, Market Cap: ¥7,500.2 billion, FY24E P/E: 6.4, ROE: 7.5% [5] - Suzuki Motor: Overweight, Price: ¥1,787, Target Price: ¥2,300, Market Cap: ¥3,509.7 billion, FY24E P/E: 8.6, ROE: 14.5% [5] - SUBARU: Underweight, Price: ¥2,625, Target Price: ¥2,500, Market Cap: ¥1,923.9 billion, FY24E P/E: 5.5, ROE: 12.9% [5] - Yamaha Motor: Overweight, Price: ¥1,075, Target Price: ¥1,500, Market Cap: ¥1,103.3 billion, FY24E P/E: 9.7, ROE: 13.3% [5] - Isuzu Motors: Overweight, Price: ¥1,924, Target Price: ¥2,600, Market Cap: ¥1,372.5 billion, FY24E P/E: 9.8, ROE: 9.5% [5] - Denso: Overweight, Price: ¥1,897, Target Price: ¥2,300, Market Cap: ¥5,522.1 billion, FY24E P/E: 13.0, ROE: 8.0% [5] - Aisin: Overweight, Price: ¥1,781, Target Price: ¥2,200, Market Cap: ¥1,440.9 billion, FY24E P/E: 13.4, ROE: 5.2% [5] - Bridgestone: Overweight, Price: ¥6,106, Target Price: ¥6,500, Market Cap: ¥4,357.8 billion, FY24E P/E: 14.7, ROE: 8.0% [5] Earnings Forecast Summary - Toyota's revenue for FY24 is projected at ¥45,095.3 billion, with a YoY growth of 21.4% and a net profit of ¥4,944.9 billion [17]. - Honda's revenue for FY24 is projected at ¥20,428.8 billion, with a YoY growth of 20.8% and a net profit of ¥1,107.2 billion [17]. - Nissan's revenue for FY24 is projected at ¥12,685.7 billion, with a YoY growth of 19.7% and a net profit of ¥426.6 billion [17]. - Suzuki's revenue for FY24 is projected at ¥5,374.3 billion, with a YoY growth of 15.8% and a net profit of ¥267.7 billion [17]. - SUBARU's revenue for FY24 is projected at ¥4,702.9 billion, with a YoY growth of 24.6% and a net profit of ¥385.1 billion [17].

Core Viewpoint - Goodyear Tire & Rubber Company has initiated a public offering of $500 million in 5-year senior notes to refinance existing debt, specifically to redeem its 5.000% Senior Notes due 2026 [1][2]. Group 1: Offering Details - The company is offering $500 million in aggregate principal amount of senior unsecured notes [1]. - The net proceeds from this offering will be used to redeem $400 million of the outstanding $900 million 2026 Notes [2]. - The redemption date for the $400 million of 2026 Notes is set for June 30, 2025 [2]. Group 2: Management and Underwriters - A consortium of financial institutions, including Deutsche Bank Securities Inc. and BofA Securities, is managing the offering [3]. - The offering will be conducted under an effective shelf registration statement filed with the U.S. Securities and Exchange Commission [4]. Group 3: Company Overview - Goodyear is one of the largest tire manufacturers globally, employing approximately 68,000 people and operating 53 facilities across 20 countries [5]. - The company has two Innovation Centers located in Akron, Ohio, and Colmar-Berg, Luxembourg, focusing on developing advanced products and services [5].

Core Viewpoint - Goodyear Tire & Rubber Co. has shown significant stock performance in 2025, with a 28% increase, despite challenges from past debt and mixed earnings results [1][2][4]. Financial Performance - Goodyear's Q1 2025 earnings reported a negative earnings per share of $0.04, which was better than the forecast of negative $0.06, but revenue of $4.25 billion fell short of expectations of $4.51 billion [4]. - The company is still down over 5% in the last 12 months, indicating ongoing struggles despite recent stock gains [2]. Analyst Ratings and Price Targets - JPMorgan Chase & Co. has reiterated an Overweight rating on Goodyear with a price target of $17, which is 46% above the stock's closing price on May 28 [5]. - The consensus price target is $14, indicating a potential upside of 21.21% from the current price of $11.55 [8]. Strategic Initiatives - Goodyear's "Going Forward" plan aims for $1.5 billion in savings, margin growth, and debt reduction, and is reportedly ahead of schedule [6]. - The company has raised nearly $1.4 billion in cash through the divestment of two major assets in 2025, including the sale of its Dunlop assets and a majority stake in Goodyear Chemicals [7]. Competitive Position - Goodyear is insulated from tariffs, with only 12% of its U.S. tire supply coming from non-USMCA countries, providing a competitive advantage [9]. - The company has pricing power due to the lack of tariff burdens, which could enhance market share [10]. Investment Perspective - Owning Goodyear stock in 2025 is viewed as a growth opportunity, especially for contrarian investors looking for undervalued stocks [11].

Core Insights - Goodyear is entering the software-defined vehicle (SDV) space by promoting its SightLine suite of tire intelligence software on the SDVerse platform, marking a significant shift towards digital solutions in the automotive industry [1][2][3] - The SightLine suite includes features such as real-time tire health diagnostics, road surface sensing, and predictive maintenance insights, aimed at enhancing vehicle performance, safety, and efficiency [2][3] - SDVerse serves as a B2B marketplace for vehicle software, facilitating the integration of Goodyear's digital offerings into core vehicle systems and reflecting a broader industry trend towards data-driven and connected platforms [2][5] Company Developments - Goodyear's partnership with SDVerse allows for collaboration with other OEMs and industry members, addressing the evolving demands of the automotive sector [3] - The CEO of SDVerse highlighted the importance of Goodyear's entry into software, emphasizing the potential for tires to evolve into intelligent systems that contribute real-time data across the vehicle ecosystem [4] - SDVerse is backed by major industry players such as General Motors, Magna, and Wipro, positioning itself as a key player in the future of software-defined vehicles [5]

Core Viewpoint - Goodyear Tire & Rubber Company has signed a definitive agreement to sell the majority of its Goodyear Chemical business to Gemspring Capital Management for approximately $650 million, as part of its strategic transformation plan [1][2][3]. Group 1: Transaction Details - The transaction involves the sale of Goodyear Chemical facilities located in Houston and Beaumont, Texas, along with a research office in Akron, Ohio [2]. - Goodyear will receive cash proceeds of approximately $650 million at closing, subject to post-closing adjustments [2]. - A long-term supply agreement is included in the transaction terms [2]. Group 2: Strategic Implications - The sale reflects Goodyear's commitment to optimizing its portfolio and enhancing shareholder value [3]. - Proceeds from the transaction will be used to reduce leverage and fund initiatives related to the Goodyear Forward transformation plan [3]. Group 3: Operational Impact - Goodyear will retain its Chemical facilities in Niagara Falls, New York, and Bayport, Texas, along with rights to the products produced at these locations [4]. - The transaction is subject to regulatory approval and other customary closing conditions, with an expected closing date by late 2025 [3]. Group 4: Advisory Support - Lazard is acting as the lead financial advisor, Deutsche Bank is serving as a financial advisor, and Squire Patton and Boggs is providing legal advice to Goodyear [5]. Group 5: Company Overview - Goodyear is one of the largest tire companies globally, employing about 68,000 people and operating 53 facilities in 20 countries [6]. - The company has two Innovation Centers located in Akron, Ohio, and Colmar-Berg, Luxembourg, focusing on developing advanced products and services [6].

Core Viewpoint - The Goodyear Tire & Rubber Company has elected Jason J. Winkler, CFO of Motorola Solutions, to its Board of Directors, effective May 15, 2025, which is expected to enhance the company's financial leadership and support its transformation plan [1][2][3]. Group 1: Board Appointment - Jason J. Winkler has been elected to Goodyear's Board of Directors and will join the Audit Committee and Committee on Corporate Responsibility and Compliance [1][2]. - Winkler's extensive experience in global finance and leadership roles at Motorola Solutions is anticipated to be a significant asset for Goodyear [3]. Group 2: Background of Jason Winkler - Winkler has been with Motorola since 2001, holding various financial leadership positions, including overseeing financial strategy and leading finance, supply chain, and IT functions [3]. - His previous experience includes roles at Oracle and Hewitt Associates, now AON [3][4]. Group 3: Goodyear Company Overview - Goodyear is one of the largest tire companies globally, employing approximately 68,000 people and operating 53 facilities in 20 countries [5]. - The company has two Innovation Centers located in Akron, Ohio, and Colmar-Berg, Luxembourg, focusing on developing advanced products and services [5].

Core Insights - Goodyear Tire reported an adjusted loss per share of 4 cents for Q1 2025, which was better than the Zacks Consensus Estimate of a loss of 6 cents, but down from earnings of 10 cents per share in the same quarter last year [1] - The company generated net revenues of $4.25 billion, a decline of 6.3% year-over-year, and fell short of the Zacks Consensus Estimate of $4.36 billion [1] Segmental Performance - The Americas segment generated revenues of $2.50 billion, slightly above the estimate of $2.49 billion, but down 3.3% year-over-year due to lower replacement volume and unfavorable forex impacts; operating income was $155 million, down 13.4% from the previous year and below the expectation of $268.7 million [3] - Revenues in the Europe, Middle East, and Africa segment were $1.28 billion, a decrease of 5.2% year-over-year, missing the estimate of $1.35 billion; the segment reported an operating loss of $5 million compared to an operating income of $8 million in the prior year due to higher raw material costs [4] - The Asia Pacific segment saw revenues fall 21.3% year-over-year to $474 million, missing the estimate of $581 million; operating profit was $45 million, down 25% from the previous year, also missing the estimate of $80.4 million [5] Financial Position - Selling, general & administrative expenses decreased to $650 million from $696 million in the prior year; cash and cash equivalents increased to $902 million as of March 31, 2025, up from $810 million as of December 31, 2024 [6] - Long-term debt and finance leases rose to $7.3 billion as of March 31, 2025, from $6.4 billion as of December 31, 2024; capital expenditure in Q1 was $259 million, down from $318 million in 2024 [6] Outlook for 2025 - Goodyear expects capital expenditures to be $950 million for 2025, with interest expenses projected between $450 million and $475 million, and depreciation and amortization estimated at approximately $925 million [7] Zacks Rank & Key Picks - Goodyear currently holds a Zacks Rank 3 (Hold); better-ranked stocks in the auto sector include Ferrari N.V. (RACE) with a Zacks Rank 1 (Strong Buy) and Standard Motor Products, Inc. (SMP) with a Zacks Rank 2 (Buy) [8]

"The Goodyear Eagle F1 Asymmetric 6 represents the next evolution of ultra-high-performance summer tire, delivering precision, grip and comfort for drivers," said Ryan Waldron, President, Goodyear Americas. "As an award-winning tire designed for a wide range of sporty and luxury vehicles, including the larger rim sizes on many of these vehicles, it provides a driving experience tailored to today's most premium enthusiasts. We're proud to introduce this globally recognized product to North America, bringing ...

Financial Data and Key Metrics Changes - First quarter sales were $4.3 billion, down 6% from last year due to lower volume and unfavorable foreign currency translation [21] - Unit volume decreased by 5%, driven by declines in consumer replacement volume in Asia Pacific and Americas [21] - Gross margin declined by 70 basis points, while SAG costs were lower by $46 million due to Goodyear Forward initiatives [21][22] - Net income increased to $115 million, driven by a $260 million gain on the sale of the OTR business [22] Business Line Data and Key Metrics Changes - Americas unit volume decreased by 600,000 units, primarily due to consumer replacement [24] - EMEA's first quarter unit volume decreased by 2%, with a segment operating income loss of $5 million, driven by higher raw material costs [26] - Asia Pacific's first quarter unit volume decreased by 12%, with segment operating income at $45 million, reflecting a strategic decision to exit less profitable business [27][15] Market Data and Key Metrics Changes - In the U.S. consumer replacement industry, low-end imports outperformed the industry, growing approximately 10% [25] - The European consumer replacement industry grew by 5%, reflecting high single-digit growth of low-end imports [26] - Asia Pacific's lower volume was largely driven by intentional choices to exit less profitable low-margin replacement business outside of China [15] Company Strategy and Development Direction - The company is focused on driving growth in the premium segment through new product launches and has extended the lineup of the Goodyear Eagle F1 Asymmetric six to nearly 250 SKUs [10] - Goodyear Forward program is critical for achieving a 10% SOI margin and net leverage of under 2.5 times by the end of the year [30] - The company is modernizing U.S. factories to increase capacity by 10 million additional premium tires in 2025 and 2026 [14][48] Management's Comments on Operating Environment and Future Outlook - Management noted significant uncertainty in light vehicle production due to global trade friction [7] - The company expects to see sequential improvements in Q2, with growth anticipated in the second half of the year [16] - Management remains confident in the strength of their value proposition with OEM customers and anticipates capturing profitable volume opportunities as the year unfolds [14][30] Other Important Information - The company expects to generate gross proceeds of at least $2 billion from asset sales as part of Goodyear Forward [20] - The Chemicals business remains under strategic review, with multiple interested parties engaged [20] - The company has planned for multiple product launches in the U.S. this year, focusing on high-performance tires [11] Q&A Session Summary Question: Clarification on price mix in Q3 and Q4 - Management confirmed that price mix is expected to be $150 million year over year for each quarter [37] Question: Competitive pricing landscape - Management noted significant price increases across the competitive set due to tariff exposure, with Goodyear's exposure being about a quarter of others [39] Question: Tariff impact specifics - Management detailed that annual inflation runs about $225 million, with tariffs adding $300 million in annualized costs [42] Question: Second half volume assumptions - Management expects recovery in Asia Pacific and strengthening volume in EMEA, while the U.S. may face challenges due to pre-buy dynamics [52] Question: Update on chemical business disposition - Management stated that the chemical business remains non-core, and they are engaged with multiple interested parties [98]

Financial Data and Key Metrics Changes - First quarter sales were $4.3 billion, down 6% from the previous year due to lower volume and unfavorable foreign currency translation [23] - Unit volume decreased by 5%, driven by declines in consumer replacement volume in Asia Pacific and Americas [23] - Gross margin declined by 70 basis points, while SAG costs were reduced by $46 million as part of the Goodyear Forward initiative [23] - Net income increased to $115 million, driven by a $260 million gain on the sale of the OTR business [24] Business Line Data and Key Metrics Changes - Americas unit volume decreased by 600,000 units, primarily due to consumer replacement [26] - EMEA's first quarter unit volume decreased by 2%, while the consumer replacement industry in Europe grew by 5% [28] - Asia Pacific's first quarter unit volume decreased by 12%, reflecting a strategic decision to exit less profitable business [29] Market Data and Key Metrics Changes - The U.S. consumer replacement industry was relatively flat, with low-end imports outperforming the industry and growing approximately 10% [26] - In Asia Pacific, the majority of replacement volume decline was due to intentional choices to exit less profitable low-margin business [16] Company Strategy and Development Direction - The company is focused on driving growth in the premium segment, particularly in larger rim sizes, and has launched multiple new products [11][12] - Goodyear Forward program is critical for achieving operational efficiency and financial targets, with a goal of 10% SOI margin and net leverage under 2.5 times by the end of the year [33][18] - The company is modernizing U.S. factories to increase capacity by 10 million additional premium tires in 2025 and 2026 [15] Management's Comments on Operating Environment and Future Outlook - Management noted significant uncertainty in light vehicle production due to global trade friction, but remains confident in the consumer OE business [7] - The company expects sequential improvements in Q2 and anticipates growth in the second half of the year, particularly in Asia Pacific [17] - Management highlighted the importance of adapting to the global trade landscape and macroeconomic developments to mitigate headwinds [19] Other Important Information - The company expects to generate gross proceeds of at least $2 billion from asset sales as part of the Goodyear Forward initiative [22] - The Chemicals business remains under strategic review, with multiple interested parties engaged [22] Q&A Session Summary Question: Clarification on price mix for Q3 and Q4 - Management confirmed a price mix of $150 million year-over-year for each quarter [40] Question: Competitive pricing actions - Management noted significant price increases across the competitive set due to tariff exposure, with Goodyear's exposure being about a quarter of others [44] Question: Tariff impact and mitigation potential - Management expressed confidence in leveraging U.S. capacity and mitigating tariff impacts through strategic pricing and product offerings [55] Question: Volume assumptions for the second half - Management expects growth in Asia Pacific and strengthening volume in EMEA, while the U.S. market may face challenges due to elevated inventory levels [60] Question: Chemical business sale strategy - Management reiterated that the Chemicals business is non-core and continues to evaluate how to maximize its value [105]