Investing.com - Paris-listed shares in Michelin (EPA:MICP) were higher in midday trading on Tuesday, with analysts citing comments made in a pre-earnings briefing.
In a note to clients, analysts at Bernstein said Michelin executives indicated in a call ahead of the tire maker's fourth-quarter results on February 12 that volumes would be broadly in line with consensus estimates.
"Management indicated they are happy with consensus for [the fourth quarter], suggesting no negative surprises to come," the Bernstein analysts wrote. "Price/mix, non-tire, scope and [foreign exchange] are also so far in line with expectations, with the potential for a small positive surprise on [foreign exchange]."
Meanwhile, Michelin was "positive" as well regarding free cash flow, in a sign that the figure "should come in comfortably above" the firm's guidance, the Bernstein analysts said.
In October, Michelin reported a drop of 4.2% in group sales in the third quarter to 6.77 billion euros, and flagged that it expects sales volumes to fall by 4%-6% this year. The company also slashed its forecast for segment operating income, or the difference between total sales and the cost of sales combined with operating expenses.
At the time, CEO Florent Menegaux warned that headwinds faced by the business would cause "substantial drops in our sales volumes and production reductions." The tire industry has been slashing costs and relying on a strong price mix as it grapples with sluggish demand at Europe's auto manufacturers and supply chain snags.
For 2025, Michelin said it expects passenger car markets to be "flat" or "slightly up", the Bernstein note showed. Across all of its operations, the second half is projected to be stronger than the first half, the analysts added.
Mining, Michelin's highest margin segment, is also tipped to recover from the first quarter as inventories return to normal levels and the impact of one-off costs in the third quarter wanes, the Bernstein analysts said.
(Reuters contributed reporting.)