Michelin
Note: This is a daily stock update and the information stands true as of 14/10/25, 09:00 CET.
Company Update:
Expert Opinion:
Our expert still sees no reason to buy into the sector for the time being. The only silver lining is the potential U-turn by the EU on the end of Internal Combustion Engines by 2035 but while this is a strong request by Germany, it hasn't been acted yet. And it may very well be too late as the amount of money that was invested (wasted?) in chasing the marginal CO2 emission is staggering. Tyre manufacturers are more defensive but momentum is likely to remain adverse at least for the short term.
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Company Update:
As expected, following a Q3 pre-close call marked by a cautious tone, Michelin has announced a profit warning. We believe this has already been partly priced in, with the stock down around 7% since the preclose call, so we do not anticipate a significant negative reaction tomorrow.
The group now expects segment operating income of €2.6–3.0bn (previously above €3.4bn) and free cash flow before M&A of €1.5–1.8bn (previously above €1.7bn).
Q3 performance was particularly impacted by the North American market, where sales deteriorated more than expected, with volumes down around 10%. The decline was driven by lower OEM truck and agriculture sales, a weak Truck replacement sell-out reflecting a soft economy, and B2C headwinds. Profitability was further weighed down by tariffs, while a stronger-than-expected USD depreciation negatively impacted FCF.
We will adjust our FY25 expectations downward in line with the updated guidance.
Expert Opinion:
Our expert still sees no reason to buy into the sector for the time being. The only silver lining is the potential U-turn by the EU on the end of Internal Combustion Engines by 2035 but while this is a strong request by Germany, it hasn't been acted yet. And it may very well be too late as the amount of money that was invested (wasted?) in chasing the marginal CO2 emission is staggering. Tyre manufacturers are more defensive but momentum is likely to remain adverse at least for the short term.
For daily updates, subscribe to our newsletter and for detailed information, reach out to us at sales@alphavalue.eu
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