Michelin: Stifel still on hold
(CercleFinance.com) - Stifel maintains its "Hold" rating on Michelin shares, along with its target price of E32 (cp: E27.
7, -0.5%).
While Michelin's sales have increased to over 28.5 billion euros in 2022, other indicators are experiencing mixed fortunes, the analyst says.
Segment operating profit in absolute terms was in line with 2023 targets from 2022 but "a/ margins have compressed, exiting the lower-end of guidance (12.5-13.5%) and b/ 2023 absolute guidance is c.E0.1bn below initial 2021 commitment for this very year", Stifel notes.
According to the analyst, "FCF was the group's main weakness in 2022".
However, for Stifel, the most interesting elements concern capital allocation. According to Michelin's CFO, the group could spend over 5 billion euros without jeopardising its current rating ("A-" for S&P / "A3" for Moody's).
Copyright (c) 2023 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.
7, -0.5%).
While Michelin's sales have increased to over 28.5 billion euros in 2022, other indicators are experiencing mixed fortunes, the analyst says.
Segment operating profit in absolute terms was in line with 2023 targets from 2022 but "a/ margins have compressed, exiting the lower-end of guidance (12.5-13.5%) and b/ 2023 absolute guidance is c.E0.1bn below initial 2021 commitment for this very year", Stifel notes.
According to the analyst, "FCF was the group's main weakness in 2022".
However, for Stifel, the most interesting elements concern capital allocation. According to Michelin's CFO, the group could spend over 5 billion euros without jeopardising its current rating ("A-" for S&P / "A3" for Moody's).
Copyright (c) 2023 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.