Morgan Stanley has reduced its overall stance on the Japanese tire sector, moving from an "Attractive" view to an "In-Line" assessment. The investment bank nevertheless retained its internal ranking of the major manufacturers as Toyo, Bridgestone, Yokohama and Sumitomo.
Within that framework, Morgan Stanley maintained an Overweight rating on Toyo Tire. The bank highlighted continued pricing potential for the WLTR product line in North America as a positive, even as it noted that expectations for Toyo's growth strategy and shareholder-return plans are already elevated ahead of the company's next medium-term plan scheduled for announcement on March 4.
Bridgestone also kept its Overweight designation from Morgan Stanley. The bank referenced ongoing assumptions about Bridgestone's work to reinvigorate the Firestone brand in North America and the expected effects of corporate restructuring. At the same time, Morgan Stanley signaled a downside risk from weak original-equipment demand for TBR (truck and bus radial) tires in the Americas.
Yokohama Rubber was downgraded by Morgan Stanley from Overweight to Equal-weight. The bank pointed to concerns that the recovery in demand for farming tires may be slowing, despite a constructive view on existing tire profit expansion and the implementation of fundamental cost-reduction measures.
Sumitomo Rubber kept its Equal-weight rating. Morgan Stanley said it expects benefits from the company's Project ARK cost-cutting program and from Dunlop all-season tires in Europe, while also warning of near-term earnings risks across Asia and other markets.
The bank's actions reflect a blend of company-level drivers - including pricing opportunities, brand rejuvenation programs and cost initiatives - alongside uneven demand trends by region and by product category.
Sector context: The changes affect market expectations for automotive suppliers and the broader automotive manufacturing supply chain, with particular attention on commercial tire demand (TBR), agricultural tire recovery and aftermarket pricing dynamics in North America and Europe.
Additional note: Editorial and generation details are recorded in the disclosure field for transparency.