Michelin shares motor higher after tyre maker vows higher profits
By Sudip Kar-Gupta
PARIS, Feb 12 () - Michelin's shares surged on Tuesday after the French tyre maker pledged further gains in operating profit this year despite challenging conditions in its main markets.
Shares in Michelin, which also reported better-than-expected results for 2018 late on Monday, were up 11.6 percent in early trading. The stock was the best performer on France's benchmark CAC-40 index.
"Michelin is able to sustain premium price points, while concurrently gaining market share - this is the perfect recipe for earnings growth," analysts at Citigroup wrote in a note, keeping a "buy" rating on Michelin shares.
Shares in Michelin's rivals also rose.
Pirelli climbed around 3.5 percent, Continental advanced by 3 percent while Nokian Tyres progressed by 1 percent.
Michelin's performance also contrasted with relatively weak results from Goodyear in February.
Michelin said buoyant sales of speciality tyres for mining and agriculture had driven a 0.3 percent increase in full-year group revenue to 22.03 billion euros.
Recurring operating profit for 2018 also rose 1.2 percent to 2.78 billion euros. Analysts polled by Infront Data for had expected on average operating profit of 2.68 billion euros on revenue of 21.74 billion.
Brokerage Jefferies also kept a "buy" rating on Michelin.
"Comparing ML's performance versus peers, especially GoodYear, we are inclined to conclude that the Michelin brand commands an enviously superior pricing power in mature markets and much improved execution," Jefferies analysts wrote.
($1 = 0.8877 euros)
($1 = 0.8875 euros)
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