J.P. Morgan Reiterates a Hold Rating on Cooper Tire Rubber

According to The Fly, in a report released today, Ryan Brinkman from J.P. Morgan reiterated a Hold rating on Cooper Tire Rubber (NYSE: CTB), with a price target of $46. The company’s shares opened today at $34.15.

Brinkman wrote, “CTB reported strongly better 2Q earnings, with adjusted EPS of $1.27 tracking significantly better than Bloomberg consensus of $1.02 and our own forecast for $0.85. The beat was driven primarily by exceptionally strong EBIT margin of 14.8%, or far better than consensus of 12.5% and our low-end 10.7%. Despite the strong beat, management largely maintained its guidance for the full year, continuing to point to total company margin to track in 2016 “modestly above” 2015’s 11.9% margin, citing potential headwinds for the second half of the year, including: (1) raw material costs, which have rebounded in recent months, and are expected to continue to trend higher for the rest of the year; (2) headwinds from pending tariffs on truck and bus radial tires (TBR) imported from China; and (3) tougher pricing pressures in the face of higher promotional activity in some product segments. Despite the much stronger 2Q results, these factors cause our full year 2016 estimate to tick up only slightly, by +$0.10, $4.20 from $4.10 prior. 2017E actually falls, to EPS of $3.85 vs. $3.95 prior.”

According to TipRanks.com, Brinkman is a 5-star analyst with an average return of 10.0% and a 57.2% success rate. Brinkman covers the Consumer Goods sector, focusing on stocks such as Tower International, Tenneco Automotive, and Delphi Automotive.

Cooper Tire Rubber has an analyst consensus of Moderate Buy, with a price target consensus of $43.67

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The company has a one year high of $43.18 and a one year low of $29.29. Currently, Cooper Tire Rubber has an average volume of 628.6k.

Based on the recent corporate insider activity of 34 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of CTB in relation to earlier this year. Most recently, in April 2016, Steven M. Chapman, a a Director at CTB bought 2,631 shares for a total of $40,004.

Cooper Tire & Rubber Co. engages in the manufacturing and marketing of replacement tires. The company focuses on the manufacture and sale of passenger and light and medium truck replacement tires. It operates through two segments: North American Tire Operations and International Tire Operations. The North American Tire Operations segment manufactures and markets passenger car and light truck tires for sale in the United States replacement market and also distributes tires for racing, medium truck and motorcycles. The International Tire Operations segment manufactures and markets passenger car, light truck, motorcycle and racing tires and tire retread material for the global market. The company was founded by John F. Schaefer and Claude E. Hart in 1914 and is headquartered in Findlay, OH.