Goodyear Tire & Rubber Company’s (GT Quick QuoteGT - Free Report) stock dropped 1.63% on Thursday to $35.60 per share after Goldman Sachs (GS Quick QuoteGS - Free Report) downgraded GT to Neutral from Buy.

Analyst David Tamberrino worries that it might take a while before the market adjusts to GT’s recent increase of tire prices while the price of raw materials decline. However, Tamberrino remains confident in the company’s growth since the demand for tire replacement is still high.

Moreover, the analyst sees the valuation of Goodyear is now more in line with its peers.

Goodyear, one of the world’s largest tire companies, manufactures tires and engineered rubber products. It reported a 2.2% increase in adjusted earnings per share year-over-year from $0.93 per share to $0.95 per share in 2016 Q4. The company’s earnings beat the Zacks Consensus Estimate but missed the revenues estimate. (To learn more about Goodyear’s Q4 Earnings report, check out this article: Goodyear (GT Quick QuoteGT - Free Report) Q4 Earnings Beat, Revenues Miss Estimates)

MarketWatch reported that shares of Goodyear had gained 17% in the past three months before the downgrade. The company closed yesterday at $36.19 per share.

Goldman Sachs cut the tire company’s stock price from $34 to $33 per share.

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