MGDDY - Michelin: Value Over Volume In Progress (Rating Downgrade)
2024-03-20 00:40:41 ET
Summary
- Michelin’s deep-innovation capabilities feed its operating profit margin development.
- Supportive shareholder's remuneration made of dividends and buybacks.
- Michelin now trades at a premium price vs. its historical valuation. We have now moved our rating to neutral.
In our last update , we emphasized how Compagnie Générale des Établissements Michelin (MGDDF) (MGDDY) was trading at a 20% discount compared to its historical average in EV on sales, EV on EBITDA, and P/E. Aside from an attractive entry price, our buy rating was backed by the company's ability to offset raw material price cost pressure, a strong balance sheet supported by M&A optionality beyond tire, and Nokian's Russian exit implications. After eight months, the company is up by >20% and exceeds our target price set at €33 per share (and $17.6 in ADR)....
Michelin: Value Over Volume In Progress (Rating Downgrade)