(News Bulletin 247) – The Clermont-based tire group gave an outlook on its operating margin for 2026, during its investor day. The Michelin share price is now rising after these announcements.

The Michelin tire group is targeting an operating margin of 14% for 2026, its financial director Yves Chapot declared on Tuesday during an investor day.

On this date, the operating profit of the activities will reach 4.2 billion euros, he added. These new objectives compare to an operating profit from activities of 3.6 billion euros in 2023 and a margin of 12.3% over the period 2021-2023.

It increased from 11.9% in 2022 to 12.6% in 2023.

A rebound in volumes in 2025 and 2026

The Clermont-based group also expects a cumulative free cash flow before acquisitions of 5.5 billion euros over the period 2024-2026, compared to 4.4 billion between 2021 and 2023, added Yves Chapot.

The financial director said he expected a rebound in volumes in 2025 and 2026 but a still negative volume effect this year.

Down slightly by 0.6% in the wake of the Parisian market before the announcements, the Michelin share changed direction to increase and thus progressed by 1.3% to 36.71 euros, this Tuesday around 4:00 p.m.

Let us recall that for the current year, Michelin indicated last February that it expected sector operating income of more than 3.5 billion euros excluding currency effects and free cash flow before acquisitions of more than 1.5 billion euros.

Outlook which was then qualified as cautious by Stifel, when UBS noted that analysts anticipated on average, for 2024, an operating profit of the sectors of 3.59 billion euros and a cash flow before acquisitions of 1.9 billion euros.

(With Reuters)