Michelin: a buyer, UBS raises target price

(CercleFinance.com) - UBS has confirmed its buy rating on the share of the French tyre maker Michelin, which remains the broker's best pick in the sector.

Alongside this buy rating, it has raised its 12-month target price from 112 euros to 120 euros (+7.1%), meaning upside potential of 17%.

First, analysts believe the risk of cuts in group financial forecasts is "limited," "which is in itself setting Michelin apart from most of our European autos coverage," the broker's report says. In addition, the guidance provided by Michelin for 2019 gives leeway for pleasant surprises, especially regarding raw materials costs.

The UBS Evidence Lab also mentions "a healthy retail pricing environment in the US and stable trends in Europe".

Finally, the margin of its Truck Division (SR2) is expected to continue improving, thanks to the anti-dumping measures that target Chinese products, which the European Commission adopted last year.



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