Michelin Shares Drop 5.84% Over the Week, Dragged Down by Negative Q3 Outlook

Weekly Performance Overview

The tire manufacturer ended the week at 29.49 euros, down 5.84% from the previous Friday. This decline is notably distinct from that of the CAC 40, which fell 1.72%, and the SBF 120, which dropped 1.75% over the same period. The bulk of the movement occurred during the session on Thursday, October 9, where the stock plummeted by 3.82% to 29.68 euros, accompanied by a tripling of traded volumes to more than 3.1 million shares, compared to about 1.3 to 1.5 million on preceding days. This weekly correction is part of a broader negative trend, with a cumulative loss of 8.47% over three months and 13.47% over a year, thus widening the gap with the Paris indices, which have shown an approximate 4.6% increase over twelve months.

Impact of Q3 Sales Volume Forecast

The sharp decline on Thursday directly followed a conference call held the previous day by the management with sell-side analysts, during which the group shared its expectations for the third quarter. Michelin indicated an anticipated decrease in sales volumes of between 4 and 6% for the period, amid challenging market conditions, particularly in North America and Europe. This pre-announcement, ahead of the official quarterly revenue release scheduled for October 22, triggered an immediate adjustment in valuations. Oddo BHF consequently lowered its price target from 42 euros to 36 euros, while maintaining its outperformance rating, noting that a downward revision of the group's annual targets would be hard to avoid. The stock recorded the steepest decline in the CAC 40 during the session on October 9, in a sector already weakened by successive warnings from automakers, including BMW the day before.