|Bid||90.38 x 18200|
|Ask||90.42 x 4300|
|Day's range||89.86 - 93.58|
|52-week range||51.45 - 133.10|
|Beta (5Y monthly)||1.71|
|PE ratio (TTM)||N/A|
|Earnings date||11 Nov 2020|
|Forward dividend & yield||3.00 (3.20%)|
|Ex-dividend date||15 Jul 2020|
|1y target est||251.52|
(Bloomberg Opinion) -- Donald Trump’s attempts to use the office of the presidency to call for a boycott of an American company have always been jarring and alarming. But the latest broadside against Goodyear Tire & Rubber Co. feels particularly shortsighted. On Wednesday, Goodyear joined a long list of corporations whose products the president has said should be shunned at one point or another. The list — which stretches even longer if you include companies targeted over the course of his campaign — is a who’s who of the American way of life, ranging from Apple Inc., AT&T Inc., Harley-Davidson Inc., Macy’s Inc. and Oreo-maker Mondelez International Inc. He’s also threatened to cancel an order for a new Air Force One jet from Boeing Co. and yank unspecified subsidies for General Motors Co. The reasons for the boycotts range from disagreements over operating decisions such as factory relocations or product selection; a means of pressure for jobs initiatives; leverage for government contract negotiations; and just general dislike. He’s never cared very much if the issues that are the grist for his corporate attacks conflict with or are the result of some of his own policies, nor has he been particularly focused on achieving more than a publicity stunt in most instances.But Goodyear is an especially curious target. The company’s biggest competitors are foreign companies such as Japan’s Bridgestone Corp., Germany's Continental AG and France’s Michelin. So when Trump tells his supports to “get better tires for far less," he would appear to be directing them to spend their dollars at the very same companies he’s spent the better part of the last four years trying to hamper with tariffs and political posturing.Not to mention, Goodyear — based in the swing state of Ohio — actually operates factories in the U.S. at a time when the White House is angling to bring more manufacturing work back to America, and as the country faces an unprecedented slump in employment because of the coronavirus pandemic. A full-throttle boycott of Goodyear may affect the Americans working at the company, not to mention their attitude toward his re-election prospects. In 2016, Goodyear was one of 15 recipients of the Secretary of Defense Employer Support Freedom Award, "the highest honor" given to the private sector to recognize support for National Guard and Reserve workforce members.Goodyear’s offense is an image circulating on social media that appeared to list “acceptable” and “unacceptable” attire and messaging for the workplace. According to the visual, support for the Black Lives Matter movement, as well as LGBT initiatives, falls into the “acceptable” category; politically affiliated slogans or material (including the “Make America Great Again” attire featured in the Trump campaign) as well as support for the “All Lives Matter” and “Blue Lives Matter” movements are deemed “unacceptable.” In a statement, Goodyear said the slide wasn’t distributed by corporate headquarters and wasn’t part of a diversity training program, as was alleged on social media.It remains unclear who exactly created this visual. But once again, Trump’s instinct is to shoot first and ask questions later, a dangerous instinct for someone in charge of running an entire country. It feels particularly notable that his tweet is focused on the alleged ban on the MAGA attire his campaign popularized; he never misses an opportunity to worry about himself. Never mind that even if the slide deck is true, it would also appear to ban, say, t-shirts supporting Trump’s challenger, former Vice President Joe Biden.In other comments to local news outlets, Goodyear made a distinction between allowing employees to express themselves on issues of racial justice and equity in the aim of fostering a more respectful workplace, and wanting to avoid political campaigning for either side. It's an interesting portrait of the challenges corporate America is facing as companies try to respond to demands for social progress. But the complexity of that dilemma is lost on Trump. Trump's not the only politician to target or boycott specific companies. Celebrities and prominent Democrats including Representative Alexandria Ocasio-Cortez of New York panned Goya Foods earlier this year after the company's CEO expressed support for Trump. In 2016, Senator Bernie Sanders of Vermont called on Trump to threaten to withhold defense contracts from United Technologies Corp. (now Raytheon Technologies Corp.) over the status of a factory in Indiana. It’s fair to question the potential ramifications of those calls on rank-and-file Americans, too. “Two can play the same game,” Trump said. But this isn’t high school and only one person is the president. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brooke Sutherland is a Bloomberg Opinion columnist covering deals and industrial companies. She previously wrote an M&A column for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- In 2008, Schaeffler AG, a family-owned German auto parts supplier, made an offer to buy the shares of its listed rival Continental AG. It almost collapsed under the debt it amassed to fund the deal, which was unveiled shortly before the Lehman Brothers bankruptcy. A decade later, another privately held German car parts company, ZF Friedrichshafen AG, has made a similarly ill-timed, debt-funded takeover: the $7 billion acquisition of truck-braking specialist Wabco Holdings Inc. ZF is now cutting thousands of jobs to keep its creditors at bay.It’s possible you haven’t heard of ZF, because it doesn’t sell directly to consumers and isn’t listed on the stock market. But you will have heard of Ferdinand von Zeppelin, the man who set up ZF a century ago to start building gears for his airships. This mode of travel captured the world’s imagination until the 1937 Hindenburg fire ended the era of luxurious passenger-carrying dirigibles.Today ZF is one of the largest auto parts suppliers, with almost 40 billion euros ($45 billion) of yearly sales. Its 160,000 employees make everything from vehicle transmissions to braking and automated-driving technology.Instead of airships, ZF has used aggressive dealmaking to cross the Atlantic. It swallowed U.S. rival TRW Automotive for $12.9 billion in 2014, and after years eyeing Wabco it finally made a move last year. (Wabco is based in Bern, Switzerland, but was listed in the U.S.) These deals have helped reduce the company’s dependence on combustion-engine technologies, which now comprise less than 30% of ZF’s revenues. But future-proofing has forced the once cautious German group to embrace some pretty racy, Anglo-Saxon ways. The Wabco deal was priced at an eye-watering 20 times the target’s average earnings over the past three years. ZF has amassed 9.6 billion euros of debt and it has another 5 billion euros of pension liabilities, according to Bloomberg data. Wabco’s boss, Jacques Esculier, is in line to receive a $24 million golden parachute payment for selling to ZF, but that’s nothing compared with the $88 million that TRW boss John Plant received after ZF’s takeover.Some companies have tried to amend or back out of deals agreed before the coronavirus pandemic but the Wabco deal closed as planned last month. ZF’s management wrote immediately to employees, revealing up to 15,000 job cuts (about 10% of its workforce). If debt covenants aren’t met, “external creditors could demand influence over our business decisions,” the email warned. Lacking a stock market listing, ZF can’t easily raise capital from equity investors.When car sales were still growing steadily, automotive companies and their suppliers could afford to carry some excess weight. ZF’s operating profit margins were about 4% on average over the past five years, providing only a thin cushion. Now it’s having to confront three shocks all at once: coronavirus production shutdowns, a global recession and the structural shift to electric vehicles. About 80% of ZF’s 50,000 German employees have had their working hours cut because of the pandemic. The company warned it will make large losses and credit-rating agencies have downgraded its debt to junk. ZF has joined the ranks of so-called “fallen angels,” which have lost their investment-grade status. Its bonds lost more than a quarter of their value at one point, but have rebounded following aggressive market interventions by central banks. So is this just another tale of a debt-enamored company getting a coronavirus comeuppance? Maybe not. In at least a couple of respects ZF is pretty unique.About 94% of the company’s shares are controlled by the Zeppelin Foundation, a legacy of the airship inventor that’s overseen today by the German city of Friedrichshafen — population 60,000. The cost cuts are a blow to the town, situated on the shores of the idyllic Lake Constance. Dividends from ZF helped pay for its hospital, university and preschools. The town’s mayor, Andreas Brand, sits on the company’s supervisory board and is pretty influential. Stefan Sommer, the architect of ZF’s debt-funded expansion, stood down as chief executive officer in 2017 after clashing with the more cautious Brand.ZF’s borrowings are pretty esoteric too. It has regular bonds but it’s also a prolific user of Schuldschein finance, a form of debt — not quite a loan and not quite a bond — that’s popular with Germany’s “Mittelstand” of small and medium-sized companies. Lately this financing model has spread beyond German-speaking countries, with borrowers attracted by the limited disclosure requirements. Schuldschein debt can cause complications, though, if a company gets into difficulty. The permission of each borrower (rather than a simple majority) is required to restructure the debt.No wonder ZF is so keen to keep its creditors at arm’s length. Last month it amended a key lending agreement, which will allow its net borrowings to widen to as much as 5.5 times Ebitda (a measure of cash earnings) in the next 12 months. The company is not in any immediate danger because it has about 10 billion euros of cash, cash equivalents and credit facilities, and there are no major borrowings that need refinancing soon. Still, its leverage is heading higher than its owners and lenders would like.JPMorgan Chase & Co. advised ZF on its Wabco takeover and helped furnish it with a larger overdraft facility. A decade ago JPMorgan advised Continental on how to defend itself against Schaeffler’s approach. It knows all about the pitfalls of doing a big deal at the top of the market. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Here are 5 stocks added to the Zacks Rank 5 (Strong Sell) List today