Goodyear Stock Surges After KeyBanc Foresees Upside

The equity has tacked on nearly 50% in the past nine months

Digital Content Manager
Jan 8, 2021 at 10:23 AM
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The shares of Goodyear Tire & Rubber Co (NASDAQ:GT) are up 4.5% at $11.22 this morning, after the stock received an upgrade from KeyBanc to "overweight" from "sector weight." The analyst in question said the security has "numerous pathways" to earnings upside through 2022, with company and industry-specific tailwinds in store. In addition, the firm noted it expects the tire concern to "solidly outperform" the U.S. replacement market. 

Goodyear stock has been slowly climbing up the charts since dropping to a March 19, 11-year-low of $4.09. Shares have added nearly 50% in the past nine months, with support from the equity's 60-day moving average in recent weeks. Plus, GT just broke north of recent pressure at its $11 mark to touch its highest level since mid-February. 

Analysts were pessimistic toward the security coming into today, leaving plenty of room for additional upgrades moving forward. Of the eight in question, six carried tepid "hold" or worse rating. Meanwhile, the stock's 12-month consensus target price of $12.11 is a 6.5% premium to current levels. 

The options pits lean overwhelmingly bullish, though. This is per Goodyear stock's 50-day call/put volume ratio of 22.10 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 94% of readings from the past year. This means calls are being picked up at a faster-than-usual pace. 

Today's options activity has already exploded, with 5,625 calls and 378 puts across the tape so far, which is five times the intraday average with volume running in  the 98th annual percentile. The weekly 1/22 12-strike call is by far the most popular, followed by the weekly 1/8 11-strike call, which expires this evening. 

There's still room to weight in on GT's next move with options. The stock's Schaeffer's Volatility Index (SVI) of 56% sits in the extremely low 6th percentile of its annual range, indicating that the equity sports attractively priced premiums at the moment. 

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