Compagnie Générale des Établissements Michelin (ML) AI Stock Analysis

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Compagnie Générale des Établissements Michelin

(OTC:ML)

66Neutral

Michelin exhibits strong financial performance with robust profitability and cash generation, although revenue and cash flow volatility pose risks. Technical indicators suggest a bearish trend with weak momentum. Valuation metrics indicate the stock is potentially undervalued with an attractive dividend yield. The lack of recent earnings call and corporate events limits additional insights.

Compagnie Générale des Établissements Michelin (ML) vs. S&P 500 (SPY)

Market Cap

$22.15B

Dividend Yield4.13%

Average Volume (3M)1.81M

Price to Earnings (P/E)11.6

Beta (1Y)0.79

Revenue Growth-4.06%

EPS Growth-4.47%

CountryFR

Employees117,540

SectorIndustrials

Sector Strength70

IndustryAuto - Parts

Share Statistics

EPS (TTM)2.65

Shares Outstanding705,747,250

10 Day Avg. Volume1,237,220

30 Day Avg. Volume1,809,877

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.70

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$37.00

Price Target Upside17.90% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering8

Compagnie Générale des Établissements Michelin Business Overview & Revenue Model

Company DescriptionCompagnie Générale des Établissements Michelin, commonly known as Michelin, is a leading global tire manufacturer headquartered in Clermont-Ferrand, France. Founded in 1889, the company operates in several sectors, primarily focusing on the design, production, and distribution of tires for various types of vehicles, including automobiles, airplanes, bicycles, motorcycles, and heavy-duty equipment. Michelin is also known for its involvement in publishing travel guides, maps, and the Michelin Guide, which awards stars to restaurants and hotels.

How the Company Makes MoneyMichelin generates revenue primarily through the sale of tires across different segments, including passenger cars, trucks, agricultural machinery, aircraft, and bicycles. The company's revenue model is driven by both replacement tire sales and original equipment manufacturer (OEM) contracts, where Michelin supplies tires to vehicle manufacturers. In addition to its core tire business, Michelin earns revenue from its travel-related services, such as maps and guides. The company also engages in strategic partnerships and collaborations to enhance its product offerings and market reach, contributing to its overall earnings. Michelin's focus on innovation and sustainable mobility solutions further supports its revenue streams by catering to evolving consumer and industry demands.

Compagnie Générale des Établissements Michelin Financial Statement Overview

Summary

Income Statement

Balance Sheet

Cash Flow

TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Breakdown
Income Statement		Total Revenue
27.75B	28.34B	28.59B	23.80B	20.47B	24.14B
	Gross Profit
8.02B	7.95B	7.46B	6.91B	5.63B	6.99B
	EBIT
3.48B	2.65B	3.33B	2.91B	1.89B	2.92B
	EBITDA
4.75B	4.88B	4.90B	4.54B	3.17B	4.44B
	Net Income Common Stockholders
1.92B	1.98B	2.00B	1.84B	632.00M	1.75B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.47B	2.80B	2.58B	4.48B	4.75B	1.47B
	Total Assets
19.66B	35.20B	35.35B	34.54B	31.64B	31.68B
	Total Debt
0.00	6.24B	7.45B	8.00B	8.74B	7.08B
	Net Debt
-1.59B	3.73B	4.87B	3.52B	3.99B	5.62B
	Total Liabilities
11.54B	17.24B	18.23B	19.57B	19.01B	18.45B
	Stockholders Equity
8.12B	17.95B	17.11B	14.97B	12.63B	13.23B
Cash Flow		Free Cash Flow
3.02B	3.05B	-210.00M	1.20B	1.99B	1.52B
	Operating Cash Flow
5.19B	5.29B	1.93B	2.91B	3.37B	3.32B
	Investing Cash Flow
-2.91B	-2.93B	-1.95B	-1.75B	-1.39B	-2.25B
	Financing Cash Flow
-1.99B	-2.34B	-1.86B	-1.43B	1.34B	-1.74B

Compagnie Générale des Établissements Michelin Technical Analysis

Technical Analysis Sentiment

Negative

Last Price31.38

Price Trends

50DMA

32.67

Negative

100DMA

32.51

Negative

200DMA

33.32

Negative

Market Momentum

MACD

-0.62

Negative

RSI

50.29

Neutral

STOCH

82.81

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:ML, the sentiment is Negative. The current price of 31.38 is above the 20-day moving average (MA) of 30.86, below the 50-day MA of 32.67, and below the 200-day MA of 33.32, indicating a neutral trend. The MACD of -0.62 indicates Negative momentum. The RSI at 50.29 is Neutral, neither overbought nor oversold. The STOCH value of 82.81 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FR:ML.

Compagnie Générale des Établissements Michelin Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VIE	72 Outperform	€23.04B	20.60	13.14%	3.96%	-1.45%	14.74%
RNO	69 Neutral	€13.55B	16.99	2.50%	4.01%	7.36%	-64.31%
ML	66 Neutral	$22.15B	11.64	10.41%	4.13%	-4.06%	-4.47%
AIR	64 Neutral	$106.74B	25.17	22.88%	1.22%	5.78%	11.48%
Sector *	63 Neutral	$4.28B	11.33	5.43%	214.88%	4.12%	-8.65%
SAF	59 Neutral	€95.89B	62.44	-6.13%	0.96%	17.19%	-119.44%
ALO	48 Neutral	€9.57B	―	-2.71%	1.24%	6.21%	-128.82%

* Industrials Sector Average

Performance Comparison

FR:ML

Compagnie Générale des Établissements Michelin

31.38

-3.64

-10.40%

FR:RNO

Renault

46.79

-0.82

-1.73%

FR:AIR

Airbus Group SE

140.60

-11.87

-7.79%

FR:ALO

Alstom SA

20.73

6.34

44.09%

FR:SAF

SAFRAN SA

230.10

27.26

13.44%

FR:VIE

Veolia Environnement

31.56

3.75

13.48%

Compagnie Générale des Établissements Michelin Earnings Call Summary

Earnings Call Date: Feb 12, 2025 | % Change Since: -4.65% | Next Earnings Date: Jul 24, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted strong operating income, cash flow, and improvements in safety and environmental metrics. However, challenges were noted with sales declines due to currency effects, market distortions from budget tire inflows, and a negative impact from price indexation clauses. Despite these challenges, the company maintained its guidance and showed resilience in its operational performance.

Highlights

Strong Operating Income and Cash Flow

Segment operating income reached 13.2% of sales in H1, an increase from 12.1% in H1 2023. Strong cash flow generation before acquisition of EUR 669 million was achieved.

Improved Safety and Gender Diversity

The group's safety performance improved with a total case incident rate at 1, and the percentage of women in managerial positions increased to 30.6%.

CO2 Emissions and Water Withdrawal Reduction

Reduction of CO2 emissions by 7.2% and water withdrawal by 6.3% compared to the first semester of 2023.

Margin Recovery in Road Transportation

The segment showed strong margin recovery from 5% to 9.2%, benefiting from a targeted market approach and growing contribution from Connected Solutions.

Strong Mix Improvement

A strong 1.9% mix improvement offset the negative price effect from indexation clauses.

Positive Debt Ratings

Moody's upgraded Michelin's long-term debt from A3 to A2, and Scope rated it as A.

Lowlights

Sales Decline Due to Currency Effects

Sales ended at EUR 13.5 billion, down 3.1% excluding the currency effect.

Market Distortions from Budget Tire Inflows

The tire market was distorted by high inflows of budget tires, particularly affecting passenger car and truck replacement markets.

Negative Impact of Price Indexation Clauses

A negative price effect of 0.8% was attributed to indexation clauses, impacting the automotive segment despite a strong mix.

Reduced Original Equipment Markets

OE markets saw a sharp decline, particularly in Europe with a 5% decrease, and North America with a 9% decrease for original equipment truck tires.

Challenges in Specialty Segment

The specialty segment faced adverse contexts from weak OE, particularly in agricultural and construction sectors, leading to a 7.2% volume decline.

Company Guidance

In the second quarter 2024 earnings call for Michelin (ML.PA), management provided guidance highlighting a strong operational performance despite a challenging market environment. The company reported a segment operating income of 13.2% of sales for the first half, up from 12.1% in the same period last year, and a robust cash flow generation of EUR 669 million before acquisitions. Sales reached EUR 13.5 billion, a decline of 3.1% excluding currency effects, with a mix improvement of 1.9% offsetting negative pricing due to indexation clauses. The guidance for 2024 remains unchanged, with expectations for segment operating income to exceed EUR 3.5 billion at constant exchange rates and free cash flow to surpass EUR 1.5 billion before acquisitions. Michelin also emphasized continued progress in strategic areas, such as increasing the number of women in managerial positions to 30.6% and reducing CO2 emissions by 7.2% compared to the first half of 2023.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.