Michelin: Credit Suisse cuts target price to 96 euros
(CercleFinance.com) - This morning Credit Suisse reported on the share of French tyre maker Michelin, whose quarterly publication was severely sanctioned last week.
Maintaining a neutral rating on the stock, analysts lowered their target price from 114 euros to 96 euros (-15.8%).
Michelin's quarterly publication last week included several points. First of all, the group has "significantly" reduced its forecasts for volume growth for so-called SR1 (passenger car tyres) and SR2 (trucks) markets, and "moderately" for the SR3 (specialty tyres, mining and aeronautics, for example). At stake: "a sharp slowdown in global markets, especially China and Europe" that occurred at the end of Q3 and early Q4, says Credit Suisse.
Admittedly, Michelin has, this time, finetuned its own earnings estimates, "as consensus expectations were too high". "The new guidance is c. 11% below IBES consensus" before the publication, the broker reports. Credit Suisse has therefore reduced its operating profit forecasts by 5% to 7% for the period from 2018 to 2020, which justifies the reduction in its target price.
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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.
Maintaining a neutral rating on the stock, analysts lowered their target price from 114 euros to 96 euros (-15.8%).
Michelin's quarterly publication last week included several points. First of all, the group has "significantly" reduced its forecasts for volume growth for so-called SR1 (passenger car tyres) and SR2 (trucks) markets, and "moderately" for the SR3 (specialty tyres, mining and aeronautics, for example). At stake: "a sharp slowdown in global markets, especially China and Europe" that occurred at the end of Q3 and early Q4, says Credit Suisse.
Admittedly, Michelin has, this time, finetuned its own earnings estimates, "as consensus expectations were too high". "The new guidance is c. 11% below IBES consensus" before the publication, the broker reports. Credit Suisse has therefore reduced its operating profit forecasts by 5% to 7% for the period from 2018 to 2020, which justifies the reduction in its 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.