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Compagnie Generale des Etablissements Michelin
(OTC:MGDDY)
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Rating:67Neutral
Price Target:
$19.00
▼(-7.14% Downside)
Action:Downgraded
Date:10/28/26
The score is driven primarily by solid financial performance (healthy profitability, improved leverage, and positive free cash flow despite uneven conversion) and a supportive valuation (moderate P/E and strong dividend yield). Earnings call signals are constructive with reaffirmed guidance and improving margins, but meaningful FX/inflation/restructuring headwinds remain. Technicals are the main detractor, with the stock below key moving averages and bearish momentum indicators.
Positive Factors
Brand strength and market share
Michelin’s strong brand is supporting replacement-market growth and share gains, where customer choice and premium positioning can be durable. This strengthens pricing power, supports mix improvement, and helps the company defend demand across multiple tire categories and regions.
Negative Factors
Weak demand and volume pressure
Demand weakness across original equipment, North America, and some commercial markets limits near-term volume leverage and makes revenue growth dependent on pricing and mix. If these conditions persist, lower utilization and weaker customer activity could constrain operating-income expansion.
Read all positive and negative factors
Positive Factors
Negative Factors
Brand strength and market share
Michelin’s strong brand is supporting replacement-market growth and share gains, where customer choice and premium positioning can be durable. This strengthens pricing power, supports mix improvement, and helps the company defend demand across multiple tire categories and regions.
Read all positive factors
Compagnie Generale des Etablissements Michelin (MGDDY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$24.32B
Dividend Yield4.69%
Average Volume (3M)15.04K
Price to Earnings (P/E)13.9
Beta (1Y)0.54
Revenue Growth2.91%
EPS Growth11.19%
CountryUS
Employees122,586
SectorGeneral
Sector StrengthN/A
IndustryAuto - Parts
Share Statistics
EPS (TTM)1.16
Shares Outstanding1,375,212,800
10 Day Avg. Volume0
30 Day Avg. Volume15,037
Financial Highlights & Ratios
PEG Ratio-0.83
Price to Book (P/B)1.10
Price to Sales (P/S)0.77
P/FCF Ratio11.12
Enterprise Value/Market Cap1.34
Enterprise Value/Revenue1.26
Enterprise Value/Gross Profit4.62
Enterprise Value/Ebitda6.84
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)1.47
Revenue Forecast (FY)$29.82B
Compagnie Generale des Etablissements Michelin Business Overview & Revenue Model
Company Description
Compagnie Générale des Établissements Michelin Société en commandite par actions, commonly known as Michelin, operates globally, specializing in the production and distribution of tires. Its extensive tire portfolio caters to a broad spectrum of v...
How the Company Makes Money
Michelin makes money primarily by selling tires across multiple customer segments and vehicle categories. Its core revenue stream is the manufacture and sale of replacement tires (sold through dealers, retailers, and other distribution channels) a...
Compagnie Generale des Etablissements Michelin Earnings Call Summary
Earnings Call Date:Jul 27, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Feb 11, 2027
Earnings Call Sentiment Neutral
The call presented a balanced picture: solid operational execution, margin improvement, positive free cash flow and strong brand momentum are clear positives, supported by accretive acquisitions in polymer composites. However, material headwinds persist — notably significant currency impacts, modest volume declines (especially OE and in North America), conveyor demand weakness, geopolitical-driven raw material and logistics inflation, and elevated restructuring costs. Management confirmed full-year guidance and emphasized agility, but the outlook remains dependent on H2 market recovery and containment of inflation and FX effects.Positive Updates
Reported Revenue and Constant-FX Growth
Group revenue of €12.7 billion in H1 2026; reported decline of 2.6% driven by currency headwinds, while revenue at constant exchange rates rose by +0.5%, showing underlying resilience.
Negative Updates
Significant Currency Headwinds
Currencies had a very significant negative impact of more than €400 million on revenue and reduced segment operating income by €114 million (USD depreciation vs EUR cited as a major driver). Reported revenue fell -2.6% despite slight constant-FX growth.
Read all updates
Q2-2026 Updates
Positive
Negative
Reported Revenue and Constant-FX Growth
Group revenue of €12.7 billion in H1 2026; reported decline of 2.6% driven by currency headwinds, while revenue at constant exchange rates rose by +0.5%, showing underlying resilience.
Read all positive updates
Company Guidance
Michelin confirmed its 2026 guidance, reiterating that segment operating income at constant scope and FX should exceed 2025 levels and that free cash flow before M&A will top €1.6bn; the group maintains a ~€2.0bn CapEx plan for the year and a balanced capital allocation returning ~€1.7bn to shareholders (≈€944m dividends paid in May and a €750m buyback program, of which €300m executed by end‑June). Management noted H1 context (revenue €12.7bn, ‑2.6% reported / +0.5% at constant FX; SOI €1.45bn, 11.4% margin, +0.3pts; free cash flow €282m; volumes ‑0.9%), reiterated M&A activity (~€600m spent in H1 with Tex‑Tech closing in H2) and that recent acquisitions will boost Polymer Composite Solutions revenue by ~35% on a full‑year basis (PCS up 16% in H1). On costs, Michelin keeps the Middle‑East stress test (Brent ~$100/bbl) and the associated ~€400m potential additional inflation in scope, while updating expectations to a net raw‑materials tailwind of about €100m for 2026 and a manufacturing & logistics headwind of roughly €230m after restructuring; net debt gearing stood at 26% at June (vs 22% a year ago), and restructuring cash-outs are estimated at ~€400–500m in 2026 and ~€150m in 2027.Compagnie Generale des Etablissements Michelin Financial Statement Overview
Summary
Income Statement
63
Positive
Balance Sheet
76
Positive
Cash Flow
66
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 25.90B | 25.99B | 27.19B | 28.34B | 28.59B | 23.80B |
| Gross Profit | 7.05B | 7.02B | 7.75B | 7.95B | 7.54B | 6.99B |
| EBITDA | 4.76B | 4.65B | 4.83B | 4.88B | 4.95B | 4.54B |
| Net Income | 1.61B | 1.67B | 1.88B | 1.98B | 2.00B | 1.84B |
Balance Sheet | ||||||
| Total Assets | 35.89B | 35.02B | 37.35B | 35.20B | 35.35B | 34.70B |
| Cash, Cash Equivalents and Short-Term Investments | 2.89B | 3.97B | 4.03B | 2.80B | 2.87B | 4.81B |
| Total Debt | 7.92B | 6.61B | 7.37B | 6.24B | 7.34B | 7.82B |
| Total Liabilities | 18.38B | 16.94B | 18.72B | 17.24B | 18.23B | 19.73B |
| Stockholders Equity | 17.50B | 18.07B | 18.63B | 17.95B | 17.11B | 14.97B |
Cash Flow | ||||||
| Free Cash Flow | 1.97B | 1.79B | 2.07B | 3.05B | -210.00M | 1.20B |
| Operating Cash Flow | 4.16B | 3.82B | 4.34B | 5.29B | 1.93B | 2.91B |
| Investing Cash Flow | -2.33B | -1.54B | -2.11B | -2.93B | -1.95B | -1.75B |
| Financing Cash Flow | -2.09B | -2.16B | -794.00M | -2.34B | -1.86B | -1.43B |
Compagnie Generale des Etablissements Michelin Technical Analysis
Negative
20.46
Price Trends
19.22
Negative
19.39
Negative
18.59
Negative
Market Momentum
-0.42
Positive
37.45
Neutral
20.17
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MGDDY, the sentiment is Negative. The current price of 20.46 is above the 20-day moving average (MA) of 18.48, above the 50-day MA of 19.22, and above the 200-day MA of 18.59, indicating a bearish trend. The MACD of -0.42 indicates Positive momentum. The RSI at 37.45 is Neutral, neither overbought nor oversold. The STOCH value of 20.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MGDDY.
Compagnie Generale des Etablissements Michelin Peers Comparison
UnderperformOutperform
Sector (55)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $3.69B | 18.39 | 13.42% | 4.50% | 3.30% | -1.80% | |
67 Neutral | $24.32B | 13.88 | 11.29% | 4.69% | 2.91% | 11.19% | |
55 Neutral | $6.65B | 3.83 | -15.92% | 6.20% | 10.91% | 7.18% | |
53 Neutral | $4.33B | 9.50 | 7.09% | 7.02% | -2.55% | -33.32% | |
51 Neutral | $16.79B | 468.46 | 0.69% | 3.46% | 5.29% | -95.50% | |
45 Neutral | $1.26B | -0.50 | -84.20% | 4.87% | -4.31% | -716.40% | |
45 Neutral | $372.98M | -6.71 | 0.17% | ― | 2.08% | -288.55% |
* General Sector Average
MGDDY
Compagnie Generale des Etablissements Michelin
17.71
1.74
10.91%
DORM
Dorman Products
124.31
-14.42
-10.39%
GPC
Genuine Parts Company
121.80
-5.25
-4.13%
GT
GoodYear Tire
4.39
-2.69
-37.99%
LKQ
LKQ
17.10
-12.55
-42.33%
CPS
Cooper-Standard Holdings
20.99
-16.85
-44.53%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.