Compagnie Generale des Etablissements Michelin (MGDDY) AI Stock Analysis

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Compagnie Generale des Etablissements Michelin

(OTC:MGDDY)

Rating:67Neutral

Price Target:―

Michelin's overall stock score is 67, driven primarily by its stable financial performance, with solid profitability and operational efficiency. The valuation is attractive with a low P/E ratio and a decent dividend yield, making it appealing for value investors. However, technical analysis indicates potential short-term bearish trends that could influence market sentiment, suggesting cautious optimism is warranted.

Compagnie Generale des Etablissements Michelin (MGDDY) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$26.74B

Dividend Yield2.98%

Average Volume (3M)131.07K

Price to Earnings (P/E)13.2

Beta (1Y)0.49

Revenue Growth-4.01%

EPS Growth-4.43%

CountryUS

Employees118,400

SectorIndustrials

Sector Strength92

IndustryAuto - Parts

Share Statistics

EPS (TTM)1.43

Shares Outstanding1,411,494,500

10 Day Avg. Volume72,545

30 Day Avg. Volume131,066

Financial Highlights & Ratios

PEG Ratio-3.38

Price to Book (P/B)1.31

Price to Sales (P/S)0.00

P/FCF Ratio7.51

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Compagnie Generale des Etablissements Michelin Business Overview & Revenue Model

Company DescriptionCompagnie Generale des Etablissements Michelin (MGDDY), commonly known as Michelin, is a leading global tire manufacturer. Founded in 1889 and headquartered in Clermont-Ferrand, France, the company is renowned for its innovative tire solutions and commitment to sustainable mobility. Michelin's product range includes tires for passenger cars, trucks, motorcycles, bicycles, aircraft, and heavy-duty vehicles. Beyond tires, the company is involved in the publication of travel guides, maps, and atlases, as well as digital services related to mobility.

How the Company Makes MoneyMichelin generates revenue primarily through the sale of tires and related products across various segments including passenger vehicles, commercial trucks, motorcycles, and specialty vehicles like aircraft and agricultural machinery. The company also earns from its travel-related publications and digital mobility services. Michelin's revenue model is augmented by its global presence, extensive distribution network, and strategic partnerships with automotive manufacturers, which ensure a steady demand for its products. Additionally, Michelin invests in research and development to innovate and improve its offerings, thereby maintaining its competitive edge and driving sales.

Compagnie Generale des Etablissements Michelin Financial Statement Overview

Summary

Compagnie Generale des Etablissements Michelin shows solid financial health with strong cash flow management and improving balance sheet leverage. However, a slight decline in revenue growth and net profit margin indicates potential challenges in maintaining profitability levels. Operational efficiency remains consistent, supported by stable EBIT and EBITDA margins.

Income Statement

Positive

The company has shown a stable gross profit margin, maintaining around 28% over the years. Net profit margin has been slightly decreasing, from 7.2% in 2021 to 7% in 2023, indicating slight pressure on profitability. Revenue growth was negative in 2023, at -0.86%, after a positive growth of 20.1% in 2021, suggesting a possible plateau in revenue expansion. EBIT and EBITDA margins have remained flat, pointing to consistent operational efficiency.

Balance Sheet

Positive

The debt-to-equity ratio improved from 0.61 in 2021 to 0.35 in 2023, reflecting better financial leverage management. Return on Equity (ROE) decreased slightly from 12.3% in 2021 to 11% in 2023, showing a slight decrease in shareholder returns. The equity ratio improved to 51% in 2023 from 42% in 2021, indicating a stronger equity position relative to total assets.

Cash Flow

Positive

Operating cash flow to net income ratio improved significantly from 1.05 in 2021 to 2.67 in 2023, showing better cash generation relative to net income. Free cash flow rebounded strongly in 2023 to $3.05 billion from a negative position in 2022, indicating strong cash management. The free cash flow to net income ratio was positive at 1.54 in 2023, highlighting robust cash flow relative to earnings.

TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Breakdown
Income Statement		Total Revenue
27.75B	28.34B	28.59B	23.80B	20.47B	24.14B
	Gross Profit
8.06B	7.95B	7.54B	6.99B	5.71B	7.08B
	EBIT
3.38B	2.65B	3.02B	2.78B	1.40B	2.69B
	EBITDA
5.53B	4.88B	4.95B	4.54B	3.44B	4.48B
	Net Income Common Stockholders
1.92B	1.98B	2.00B	1.84B	632.00M	1.74B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.47B	2.80B	2.65B	4.81B	4.98B	1.65B
	Total Assets
19.66B	35.20B	35.35B	34.70B	31.64B	31.68B
	Total Debt
0.00	6.24B	7.34B	7.82B	8.62B	6.89B
	Net Debt
-1.59B	3.73B	4.97B	3.44B	3.92B	5.42B
	Total Liabilities
11.54B	17.24B	18.23B	19.73B	19.01B	18.45B
	Stockholders Equity
8.12B	17.95B	17.11B	14.97B	12.63B	13.23B
Cash Flow		Free Cash Flow
3.02B	3.05B	-210.00M	1.20B	2.15B	1.52B
	Operating Cash Flow
5.19B	5.29B	1.93B	2.91B	3.37B	3.32B
	Investing Cash Flow
-2.91B	-2.93B	-1.95B	-1.75B	-1.39B	-2.25B
	Financing Cash Flow
-1.99B	-2.34B	-1.86B	-1.43B	1.34B	-1.74B

Compagnie Generale des Etablissements Michelin Technical Analysis

Technical Analysis Sentiment

Positive

Last Price18.90

Price Trends

50DMA

17.62

Positive

100DMA

17.25

Positive

200DMA

17.49

Positive

Market Momentum

MACD

0.48

Negative

RSI

59.91

Neutral

STOCH

8.28

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MGDDY, the sentiment is Positive. The current price of 18.9 is above the 20-day moving average (MA) of 18.42, above the 50-day MA of 17.62, and above the 200-day MA of 17.49, indicating a bullish trend. The MACD of 0.48 indicates Negative momentum. The RSI at 59.91 is Neutral, neither overbought nor oversold. The STOCH value of 8.28 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MGDDY.

Compagnie Generale des Etablissements Michelin Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BWA	76 Outperform	$7.18B	26.28	5.38%	1.35%	-8.22%	-52.61%
LEA	76 Outperform	$4.77B	10.45	10.00%	3.45%	-3.15%	-6.70%
ALV	73 Outperform	$7.79B	11.61	28.71%	2.74%	-2.29%	35.00%
LKQ	73 Outperform	$10.37B	15.02	11.37%	2.98%	-0.74%	-13.75%
MGDDY	67 Neutral	$26.74B	13.18	10.41%	2.98%	-4.01%	-4.43%
GT	65 Neutral	$3.13B	13.06	5.06%	―	-5.43%	―
Sector *	64 Neutral	$4.39B	11.81	5.20%	249.39%	3.96%	-12.36%

* Industrials Sector Average

Performance Comparison

MGDDY

Compagnie Generale des Etablissements Michelin

18.90

-0.56

-2.88%

ALV

Autoliv

100.79

-24.76

-19.72%

BWA

BorgWarner

32.68

-2.79

-7.87%

GoodYear Tire

10.95

-1.23

-10.10%

LEA

Lear

89.16

-32.25

-26.56%

LKQ

40.19

-1.53

-3.67%

Compagnie Generale des Etablissements Michelin Earnings Call Summary

Earnings Call Date:Feb 12, 2025

(Q2-2024)

% Change Since: 13.99%|

Next Earnings Date:Jul 24, 2025

Earnings Call Sentiment Positive

The earnings call reflected a strong operational performance with significant improvements in operating income and cash flow generation, alongside notable environmental achievements. However, challenges such as volume declines in specialty segments and market distortions from budget tire inflows posed concerns. Overall, the company maintained a positive outlook with strong segment operating income and cash flow targets.

Q2-2024 Updates

Positive Updates

Strong Segment Operating Income

Segment operating income reached 13.2% of sales in H1, showing an improvement from 12.1% in H1 2023.

Cash Flow Generation

Generated a strong cash flow of EUR 669 million before acquisition, driven by disciplined budget business management.

Environmental Achievements

Reduced CO2 emissions (Scope 1 and 2) by 7.2% and water withdrawal by 6.3% versus the first semester of 2023.

Record Operating Margin

Achieved 13.2% operating margin, a record high, with a EUR 100 million increase in segment operating income like-for-like.

Positive Mix Improvement

Achieved a strong 1.9% mix improvement, more than offsetting negative price effects from indexation clauses.

Negative Updates

Volume Decline in Specialty Segment

Experienced a 7.2% volume decline in specialties, driven by lower sales in original equipment and mining adjustments.

Negative Pricing Impact

Pricing was negatively impacted by 0.8% due to indexation clauses in the contractual business.

Market Distortions

Distorted markets due to strong inflows of budget tires, particularly in passenger car and light truck segments.

Currency Headwinds

Negative currency effects impacted top-line results, notably from currencies like the Turkish lira and Japanese yen.

Company Guidance

During the Q2 2024 earnings call for Michelin (ML.PA), the company's executives provided robust guidance for the remainder of the year. They projected a segment operating income exceeding EUR 3.5 billion at constant exchange rates and free cash flow surpassing EUR 1.5 billion before acquisitions. In H1 2024, Michelin achieved a 13.2% operating income margin, up from 12.1% in H1 2023, driven by a 1.9% improvement in mix and a strong cash flow generation of EUR 669 million. The company maintained a focus on value-driven approaches and geographical segmentation, with a notable contribution from its Connected Solutions in the road transportation segment. Additionally, Michelin highlighted a favorable operating cost environment, with benefits from raw materials, energy, and seafreight, although labor costs continue to rise. Despite a challenging environment with inflated markets due to Asian tire imports, Michelin's strategic focus on high-value segments and geographies supported its strong financial outlook.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.