| Valuation method | Value, € | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 32.51 | 4 |
| Intrinsic value (DCF) | 13.29 | -58 |
| Graham-Dodd Method | 15.22 | -51 |
| Graham Formula | 11.42 | -64 |
Compagnie Générale des Établissements Michelin SCA (ML.PA) is a global leader in tire manufacturing and mobility solutions, headquartered in Clermont-Ferrand, France. Founded in 1863, Michelin operates across consumer and professional segments, producing tires for cars, motorcycles, bicycles, aircraft, and heavy machinery. Beyond tires, the company offers high-tech materials, lifestyle products, and digital mobility services, including route planning and fleet management solutions. Michelin is renowned for its innovation, sustainability initiatives, and premium brand positioning. With a strong presence in Europe, North America, and emerging markets, Michelin benefits from diversified revenue streams and a reputation for quality. The company's commitment to R&D and eco-friendly materials, such as bio-sourced and recycled rubber, reinforces its competitive edge in the evolving automotive and industrial sectors.
Michelin presents a stable investment opportunity with its strong brand equity, global footprint, and diversified product portfolio. The company's solid financials, including €27.2B in revenue and €1.88B net income (FY 2024), reflect resilience in cyclical markets. Michelin's focus on high-margin premium tires and mobility services supports profitability, while its €4.3B operating cash flow ensures financial flexibility. However, exposure to raw material price volatility (rubber, oil) and geopolitical risks in key markets could pressure margins. The stock's beta of 0.95 suggests moderate market correlation, appealing to risk-conscious investors. A dividend yield of ~2.5% (€1.38/share) adds income appeal. Long-term growth hinges on Michelin's ability to capitalize on electric vehicle tire demand and sustainable material innovation.
Michelin holds a top-tier position in the global tire industry, competing on technology, brand prestige, and distribution reach. Its competitive advantages include: (1) Premium brand perception, enabling pricing power in high-performance segments; (2) Vertical integration in raw material sourcing and proprietary rubber compounds; (3) Strong OEM relationships with automakers, particularly in Europe; (4) Diversification across consumer, commercial, and specialty tires, reducing reliance on any single segment. Michelin outperforms rivals in R&D spending, with breakthroughs like airless tires and 3D-printed solutions. However, it faces pressure from low-cost Asian manufacturers in budget segments. The company's strategic shift toward services (e.g., fleet telematics) differentiates it from pure-play tire makers. Sustainability leadership—with a goal of 100% sustainable materials by 2050—positions Michelin favorably amid tightening environmental regulations. Its main vulnerability is higher production costs compared to Asian competitors, requiring continuous innovation to justify premium pricing.