Michelin is a French tyre maker (ML, Euronext Paris). Its sales have fallen for two years. Its operating margin, the share of sales left as operating profit, was 7,9 % in 2025, down from 10,2 % in 2023. These margins are on our own basis. For each year we take off the same €673 m for other operating costs, the 2023–2025 average. The actual costs were €353 m in 2025 and €920 m in 2023.
This week's deep-dive takes Michelin through the StoxEurope Valuation Standard. It asks one question: what is the business worth if the margin stays where it is, and what if it comes back?
What is in the number
In 2026 Michelin bought three businesses: Cooley, Flexitallic and Tex Tech.
Our base estimate of €23,43 includes these three businesses at their price, about €1.077 m. It includes none of their future sales, profit or growth. We converted Tex Tech's dollar price into euros ourselves, and the total may include small other deals.
We also ran a separate test. It values the three businesses on the profit they add, after tax, growing 1,5 % a year, with all of it treated as cash. That gives about €851 m. This is a hypothetical calculation, and it is not in the base estimate. With it, the model gives €23,09 instead of €23,43.
Our number
The StoxEurope estimate is €23,43 per share on 30 October 2026. It comes from the primary model: a discounted cash flow of the whole business, which is what its future cash is worth today.
We ran three scenarios:
Downside, €20,04: sales grow slowly and the operating margin falls to 6,92 %.
Base, €23,43: sales grow slowly and the margin stays at 7,87 %.
Upside, €31,41: sales grow faster and the margin rises to 9,95 %, back to its 2024 level.
Those are scenarios, not a statistical confidence interval. The share price on 30 October 2026 was €31,88.
What €31,88 would take
What €31,88 would take
We asked one question: what single change would make our model give €31,88? Each test changes one input. All other inputs stay as in our base. These are separate tests, and none is in the estimate.
Operating margin: 9,99 % in year 5 (2030), against 7,9 % in our base. In the last three years the margin ran from 7,9 % to 10,2 %. This change applies in every forecast year and in the years after.
Sales growth: 8,47 % a year in year 5, against 1,2 % in our base. The recorded high, the best year in the history we show, is −0,9 %, still a fall. Sales would be about 1,5 times 2025 sales after 5 years. This change applies in every forecast year.
Discount rate: 5,89 %, against 7,47 % in our base. This is the yearly rate that brings future cash back to today. It depends on the operating beta, which measures how much the business moves with the market: 0,79 in this test, 1,21 in our base. At Michelin's measured beta of 1,40 (operating 1,62) the rate would be 9,06 %.
More years of growth: with 25 more years of 0,7 % growth, our model stays below €31,88. Each year's new investment earns 8,9 %, the return on capital in Michelin's record.
We have not tested combinations of smaller changes. This is not a statement of what investors believe.
The judgement that matters most
Our base keeps the margin at 7,87 % in every forecast year. We judge this the assumption most likely to make the estimate wrong. Other operating costs were €262 m in the first half of 2026, against the €673 m a year in our base. Michelin's 2026 results on 11 February 2027 are the first test over a full year.
The full workings
Read the full valuation — every assumption, every model, the full workings: https://stoxeurope.com/valuation/michelin/
Disclosures
Position disclosure: No position is held in Compagnie Générale des Établissements Michelin, in shares or any other instrument. Ledger-verified as at 1 November 2026.
This valuation is general, impersonal research—not personalised investment advice or an offer to trade. It reflects stated assumptions and information available at publication; estimates are uncertain, may change and are not guarantees. To the fullest extent permitted by law, StoxEurope accepts no liability for reliance on this publication; readers should conduct their own research and review the disclosed methodology, risks and conflicts.