Michelin: Jefferies raises its recommendation to 'hold

(CercleFinance.com) - Jefferies announced on Friday that it had upgraded its opinion on Michelin from 'underperform' to 'hold', with a price target revised upwards from 30 to 34 euros.


The U.S. broker - who praised the manufacturer's "quality" first-half results - believes that the French group, like all the world's major tire 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 last 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 PER back under the 10x threshold in the short term, the broker says he has decided to raise his opinion, judging that the questions surrounding medium-term volume growth are more than offset by the favorable evolution of regulation, a point which plays in his opinion in favor of this leader in tire technologies.

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