Michelin: Jefferies upgrades to 'hold'

(CercleFinance.com) - Jefferies upgraded Michelin shares from 'underperform' to 'hold' on Friday, with a target price raised from E30 to E34.


The US broker - which praised the tyre maker's "quality" H1 results - believes that the French group, like all the world's major tyre manufacturers, has several levers at its disposal to improve its results.

These include factors such as price control, product mix, cost trends and control of its industrial footprint.

On this latter point, Jefferies considers that Michelin is in a position to increase its capacity utilization rate from 73% in 2023 to over 82% by 2026, a level which it believes could be far from a ceiling.

On the basis of these elements, and a P/E back under the 10x threshold in the short term, the broker says that it has decided to upgrade the stock, judging that the questions surrounding medium-term volume growth are more than offset by the favorable evolution of regulation, a point which plays in favor of this leader in tyre technologies.


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