Michelin: Oddo's best pick in sector report
(CercleFinance.com) - A 12% drop in production (and demand) in 2020 is now Oddo's central scenario, after multiple production stoppages.
The broker believes that 2020 should be a very contrasted year, with a first half seeing over a 30% fall, with a rebound of 9% in the second half (which is expected to continue into 2021, with a 6% expected rise).
This new scenario has led the broker to further slash its estimates (~ -35%, -60% YTD) and it now expects 40% below the consensus over 2020 (-12% on 2021), Oddo says.
Analysts therefore remain cautious about the sector and believe that conditions are not yet all in place to become more positive.
Its analyses by stock include: Michelin (Buy, TP 100 euros), which therefore remains its best pick, ahead of Pirelli (Buy, TP 4.40 euros), while it still likes Plastic Omnium (Buy, TP 20 euros) amongst equipment manufacturers and VW (Buy, TP 145 euros) and Peugeot (Buy, TP 17 euros) amongst car makers.
Conversely, it remains cautious towards Renault (Neutral, TP 20 euros) and Daimler (Reduce, vs. Neutral, TP 25 euros), while amongst OEM and tyre makers it recommends investors steer clear of Valeo (Reduce, TP 15 euros) and Nokian Tyres (Reduce, vs. Neutral, TP 17 euros), it adds.
Copyright (c) 2020 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 broker believes that 2020 should be a very contrasted year, with a first half seeing over a 30% fall, with a rebound of 9% in the second half (which is expected to continue into 2021, with a 6% expected rise).
This new scenario has led the broker to further slash its estimates (~ -35%, -60% YTD) and it now expects 40% below the consensus over 2020 (-12% on 2021), Oddo says.
Analysts therefore remain cautious about the sector and believe that conditions are not yet all in place to become more positive.
Its analyses by stock include: Michelin (Buy, TP 100 euros), which therefore remains its best pick, ahead of Pirelli (Buy, TP 4.40 euros), while it still likes Plastic Omnium (Buy, TP 20 euros) amongst equipment manufacturers and VW (Buy, TP 145 euros) and Peugeot (Buy, TP 17 euros) amongst car makers.
Conversely, it remains cautious towards Renault (Neutral, TP 20 euros) and Daimler (Reduce, vs. Neutral, TP 25 euros), while amongst OEM and tyre makers it recommends investors steer clear of Valeo (Reduce, TP 15 euros) and Nokian Tyres (Reduce, vs. Neutral, TP 17 euros), it adds.
Copyright (c) 2020 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.