Michelin: Invest Securities downgrades to sell
(CercleFinance.com) - Invest Securities has sanctioned Michelin this morning, downgrading its rating on the stock of the French tyre maker from “neutral” to “sell”.
The Parisian broker sanctions a 2017 fiscal year that has been a “bit short,” along with management's caution for 2018. It has hence cut its target price for the share from 124 euros to 117 euros, meaning downside potential of 5% relative to the share's current price.
Indeed, analysts say that published results are below expectations for two combined reasons in the second half: the effects of dollar/euro parity, pressure from raw materials costs on SR1 and SR2 (tyres for passenger cars and trucks, respectively, ed.) which weighed on margins in the first half, the broker's report explains.
What about 2018? According to Invest Securities, Michelin, which is cautious, is far from delivering any increase in its guidance. Headwinds (raw material costs and exchange rates) could penalise the group. As such, analysts will reduce their EPS estimates for 2018 (without changing 2019 estimates), hence reducing the share's target price.
Copyright (c) 2018 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
The Parisian broker sanctions a 2017 fiscal year that has been a “bit short,” along with management's caution for 2018. It has hence cut its target price for the share from 124 euros to 117 euros, meaning downside potential of 5% relative to the share's current price.
Indeed, analysts say that published results are below expectations for two combined reasons in the second half: the effects of dollar/euro parity, pressure from raw materials costs on SR1 and SR2 (tyres for passenger cars and trucks, respectively, ed.) which weighed on margins in the first half, the broker's report explains.
What about 2018? According to Invest Securities, Michelin, which is cautious, is far from delivering any increase in its guidance. Headwinds (raw material costs and exchange rates) could penalise the group. As such, analysts will reduce their EPS estimates for 2018 (without changing 2019 estimates), hence reducing the share's target price.
Copyright (c) 2018 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.