UPDATE: J.P. Morgan Color On CTB Target Increase

J.P. Morgan, which raised its PT on shares of Cooper Tire & Rubber Co. CTB, is providing some color on the stock. “We maintain our Overweight rating on CTB, and revise our Dec- 2011 price target to $30 (vs. $28 earlier) which we continue to base on 12x our 2012e EPS of $2.50,” J.P. Morgan writes. “We now think there is a 50:50 chance EPS in 2012 could potentially have a $3 handle, with the key variance being the price/raw materials spread (our official forecast assumes a roughly neutral spread in 2012). We believe that CTB's volume growth should continue to outperform industry given new product launches and likely trade-down by customers to mid-tier tire brands such as Cooper, but production capacity will be a constraining factor.” Cooper Tire & Rubber closed Tuesday at $26.53.