FBR Capital Starts Cooper Tire & Rubber (CTB) at Outperform

FBR Capital initiates coverage on Cooper Tire & Rubber (NYSE: CTB) with a Outperform rating and a price target of $40.00.

Analyst Christopher Van Horn states, "Cooper has seen some volatility in revenue growth during the past 18 months, primarily due to an Indian tire manufacturer’s proposed, and later terminated, offer to purchase the company. Now that most of the noise surrounding the transaction has seemingly faded, our general view on CTB is favorable, and we expect a positive trend to surface based on the company’s market exposure and growth strategy in the aftermarket and original equipment manufacturer (OEM) tire marketplace. The company is highly leveraged to the automotive aftermarket and commercial trucking market. Business from these markets is improving due to a variety of factors, including an increase in miles driven and strengthening commercial trucking trends. Accordingly, we see more potential for upside than downside to our estimates and price target on CTB shares. Based on Cooper’s heavy exposure and margin leverage to aftermarket demand, we believe the company can leverage the current aftermarket up-cycle and drive volume and EPS growth through 2015 and beyond."

For an analyst ratings summary and ratings history on Cooper Tire & Rubber click here. For more ratings news on Cooper Tire & Rubber click here.

Shares of Cooper Tire & Rubber closed at $32.12 yesterday.

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