GT (GT) Stock Analysis

Verdict: AVOID

Surviving heavy $7.26B net debt depends on portfolio restructuring, but negative FCF and 28.1x Net Debt/EBITDA keep risk near 52W lows.

Investment score: 35/100

Is GT Stock Worth Reviewing? AI Model Thesis

The AI model views Goodyear as a high-risk turnaround candidate burdened by extreme leverage ($7.26B debt) and persistent cash drain. Despite deep price-to-sales discounting, the model recommends AVOID until balance sheet deleveraging yields positive free cash flow.

Peers

PeerP/EP/BP/SEV/EBITDAROIC %Net margin %
AMTY27.270.600.5517.50—0.02

Should You Buy or Sell GT Stock? Model Reasoning

The model sees severe solvency risk driven by $7.26B in total debt and a elevated Net Debt/EBITDA ratio of 28.08x, alongside four straight years of negative free cash flow (-$30M in 2025). Although the stock trades at a low P/S of 0.08x and P/B of 0.51x, operational margin contraction (TTM operating margin 2.1% vs peer AMTY 1.5% but net margin -14.4%) prevents near-term cash generation without significant debt paydown or asset sales.

GT Fair Value & Price Target — AI Valuation

  • Model Assumptions: ["Consensus forecast of EPS recovery to $0.25 in 2027 and $0.93 in 2028 is achieved via cost restructuring.","Price-to-Book multiple re-rates from 0.51x TTM toward peer AMTY level of 0.60x on $11.23 per share book value.","Free cash flow turns positive by 2027, preventing covenant breaches or dilutive equity raises."]

GT Risk & Opportunity Analysis

Key Investment Risks

  • Refinancing and Interest Expense Shock on $7.26B Debt Load — With $7.26B in total debt and Net Debt/EBITDA at 28.08x, high 10-year Treasury yields (5.14%) significantly raise refinancing costs and debt service obligations.
  • Continued Negative Free Cash Flow Exhausting Liquidity — Free cash flow was -$30M in 2025, -$490M in 2024, and -$18M in 2023; persistent failure to cover CapEx ($826M in 2025) risks liquidity exhaustion.
  • Cyclical Auto Sector Slowdown and Volume Contraction — Annual revenue shrank 4.31% in 2025 to $18.28B; worsening vehicle production or consumer trade-down to lower-tier brands threatens top-line growth.
  • Dilutive Equity Issuance to Avoid Covenant Breaches — If operational turnaround targets are missed, management may be forced to issue dilutive equity to meet leverage covenants before debt maturities in 2027-2028.

Growth Opportunities & Upside Drivers

  • Portfolio Restructuring and Asset Sales ("Goodyear Forward" Plan) — Execution on divestitures (such as Dunlop brand rights or Chemical business) could generate non-dilutive liquidity to reduce the $7.26B debt load by late 2027.
  • High-Margin Premium & EV Tire Mix Expansion — Pivoting product mix toward 18-inch+ passenger tires and high-margin EV replacement fitments can expand gross margins from 18.3% toward peer AMTY's 27.2% by 2028.
  • Deep Valuation Discount on Asset and Sales Metrics — Trading at P/S 0.08x and P/B 0.51x provides substantial upside re-rating potential toward analyst target of $8.00 if operating margins recover above 5.0%.
  • Raw Material and Freight Cost Moderation — A decline in synthetic rubber and transportation input costs directly improves cost of goods sold, aiding near-term operating cash flow.

GT Action Plan — Entry, Exit and Stop Loss from the Model View

moderate

    aggressive

      conservative

        Frequently Asked Questions About GT (GT)

        Is GT stock a good investment?

        The cached TradeMates AI model rates GT as AVOID with an investment score of 35/100. The AI model views Goodyear as a high-risk turnaround candidate burdened by extreme leverage ($7.26B debt) and persistent cash drain. Despite deep price-to-sales discounting, the model recommends AVOID until balance sheet deleveraging yields positive free cash flow. This is algorithmic model output, not personal investment advice.

        Does GT pay a dividend?

        The cached stock data on this page does not show a positive dividend yield for GT. Dividend status can change, so verify the latest company filings before relying on income assumptions.

        What does GT stock do?

        Global tire manufacturer and distributor generating revenue from OEM fitments, replacement tire sales through ~1,000 retail outlets and independent dealers, fleet maintenance services, and chemical/rubber manufacturing.

        What is GT stock's price target?

        This cached page does not contain a precise model fair value for GT.

        Is GT stock a buy?

        The TradeMates model verdict for GT is AVOID with an investment score of 35/100. Treat this as a model signal to review, not a personal buy recommendation.

        Is GT a good dividend stock?

        GT is not presented as a dividend idea on this cached TradeMates page because no positive dividend yield is available in the cached data.

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