Compagnie Generale des Etablissements Michelin (MGDDY) AI Stock Analysis

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Compagnie Generale des Etablissements Michelin

(OTC:MGDDY)

Rating:66Neutral

Price Target:

$19.50

▲(3.34% Upside)

The overall stock score of 66 reflects a balanced view of Compagnie Generale des Etablissements Michelin's current position. The company's solid financial performance, particularly in profitability and operational efficiency, is a strong positive. However, technical indicators suggest a lack of momentum, and cash flow challenges could impact future financial flexibility. The valuation is attractive, supported by a reasonable P/E ratio and a strong dividend yield.

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

Market Cap

$26.35B

Dividend Yield4.01%

Average Volume (3M)10.08K

Price to Earnings (P/E)15.5

Beta (1Y)0.42

Revenue Growth-3.09%

EPS Growth-17.42%

CountryUS

Employees118,400

SectorConsumer Cyclical

Sector Strength75

IndustryAuto - Parts

Share Statistics

EPS (TTM)0.69

Shares Outstanding1,411,497,600

10 Day Avg. Volume18,858

30 Day Avg. Volume10,081

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)0.00

Price to Sales (P/S)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap1.20

Enterprise Value/Revenue1.16

Enterprise Value/Gross Profit4.08

Enterprise Value/Ebitda6.56

Forecast

1Y Price Target

$19.50

Price Target Upside3.34% Upside

Rating ConsensusHold

Number of Analyst Covering1

Compagnie Generale des Etablissements Michelin Business Overview & Revenue Model

Company DescriptionCompagnie Générale des Établissements Michelin Société en commandite par actions manufactures and sells tires worldwide. The company offers tires for private use covering cars, racing, biking, motorcycles, scooters, and mopeds; and professional use, such as freight and people transport, agriculture, construction and industrial, mining and quarries, corporate fleets, tradesmen and professionals, civil and military operations, light rail, and aircraft. It is also involved in the provision of tire-related services, including development of mobility solutions for fleet managers, vehicle manufacturers, farmers, distributors, and individuals; mobility services, such as road maps, mobile apps, itineraries, and travel guides; lifestyle products comprising car and bike accessories, shoe soles, and sports and leisure gears; and high-tech materials that include 3D metal printing, specialty, rubber, biosourced, and recycled materials. Compagnie Générale des Établissements Michelin Société en commandite par actions was incorporated in 1863 and is based in Clermont-Ferrand, France.

How the Company Makes MoneyMichelin generates revenue primarily through the sale of tires. The company's revenue model is centered around manufacturing and distributing a wide range of tires for different types of vehicles and purposes. Key revenue streams include the sale of replacement tires for passenger vehicles, commercial trucks, and specialty tires for industries such as aviation, agriculture, and construction. Michelin also benefits from its Original Equipment Manufacturer (OEM) partnerships, supplying tires directly to automotive manufacturers. Additionally, the company earns revenue from its travel and lifestyle segment, which includes the publication of Michelin guides and maps. Michelin's focus on research and development, as well as strategic acquisitions and joint ventures, further supports its revenue growth and market expansion.

Compagnie Generale des Etablissements Michelin Earnings Call Summary

Earnings Call Date:Jul 24, 2025

(Q2-2024)

% Change Since: -1.15%|

Next Earnings Date:Feb 16, 2026

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.

Compagnie Generale des Etablissements Michelin Financial Statement Overview

Summary

Compagnie Generale des Etablissements Michelin demonstrates solid profitability and operational efficiency, with stable margins and a strong return on equity. While the balance sheet reflects a balanced capital structure, the recent increase in debt requires careful monitoring. Cash flow management shows potential weaknesses, particularly in free cash flow generation, which could impact future financial flexibility.

Income Statement

Positive

The company's gross profit margin and net profit margin have remained relatively stable over the years, indicating steady profitability. However, there was a decline in total revenue from 2022 to 2023, suggesting challenges in growth. The EBIT and EBITDA margins are healthy, showcasing operational efficiency.

Balance Sheet

Positive

The debt-to-equity ratio has fluctuated, reflecting moderate leverage levels. Return on Equity (ROE) remains robust, indicating efficient use of equity. The equity ratio is stable, showing a balanced capital structure. However, the increase in total debt from 2023 to 2024 may pose potential risks if not managed well.

Cash Flow

Positive

The operating cash flow to net income ratio is healthy, indicating strong cash generation relative to net income. However, the free cash flow growth rate has been negative in recent periods, highlighting potential challenges in generating free cash flow. The free cash flow to net income ratio is positive, but it has shown a declining trend.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	27.19B	28.34B	28.59B	23.80B	20.47B
Gross Profit	7.75B	7.95B	7.54B	6.99B	5.71B
EBITDA	4.83B	4.88B	4.95B	4.54B	3.44B
Net Income	1.88B	1.98B	2.00B	1.84B	632.00M
Balance Sheet
Total Assets	37.35B	35.20B	35.35B	34.70B	31.64B
Cash, Cash Equivalents and Short-Term Investments	4.03B	2.80B	2.65B	4.81B	4.98B
Total Debt	7.37B	6.24B	7.34B	7.82B	8.62B
Total Liabilities	18.72B	17.24B	18.23B	19.73B	19.01B
Stockholders Equity	18.63B	17.95B	17.11B	14.97B	12.63B
Cash Flow
Free Cash Flow	2.07B	3.05B	-210.00M	1.20B	2.15B
Operating Cash Flow	4.34B	5.29B	1.93B	2.91B	3.37B
Investing Cash Flow	-2.11B	-2.93B	-1.95B	-1.75B	-1.39B
Financing Cash Flow	-794.00M	-2.34B	-1.86B	-1.43B	1.34B

Compagnie Generale des Etablissements Michelin Technical Analysis

Technical Analysis Sentiment

Positive

Last Price18.87

Price Trends

50DMA

18.49

Positive

100DMA

18.12

Positive

200DMA

17.41

Positive

Market Momentum

MACD

0.01

Negative

RSI

60.57

Neutral

STOCH

96.12

Negative

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 18.87 is above the 20-day moving average (MA) of 18.35, above the 50-day MA of 18.49, and above the 200-day MA of 17.41, indicating a bullish trend. The MACD of 0.01 indicates Negative momentum. The RSI at 60.57 is Neutral, neither overbought nor oversold. The STOCH value of 96.12 is Negative, 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
LEA	76 Outperform	$5.50B	12.07	9.51%	3.01%	-3.12%	-8.23%
ALV	75 Outperform	$9.14B	13.01	29.99%	2.35%	-0.98%	21.64%
BWA	72 Outperform	$8.97B	44.26	3.66%	1.06%	-2.12%	-69.42%
MGDDY	66 Neutral	$26.35B	15.49	8.49%	4.01%	-3.09%	-17.42%
LKQ	64 Neutral	$8.12B	11.59	11.20%	3.87%	-3.02%	-1.02%
Sector *	64 Neutral	€7.28B	16.38	11.67%	3.52%	0.79%	-60.56%
GT	56 Neutral	$2.44B	5.98	8.37%	―	-4.52%	―

* Consumer Cyclical Sector Average

Performance Comparison

MGDDY

Compagnie Generale des Etablissements Michelin

18.87

-0.07

-0.37%

ALV

Autoliv

118.36

19.45

19.66%

BWA

BorgWarner

41.42

8.78

26.90%

GoodYear Tire

8.49

-0.45

-5.03%

LEA

Lear

102.42

-8.80

-7.91%

LKQ

30.97

-8.87

-22.26%

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.Date of analysis: Aug 08, 2025