Analysts Recommend Michelin Shares Over Goodyear

Analysts from investment bank Morgan Stanley have recommend investors buy shares in “Michelin against Goodyear” following its Alphawise surveys in Europe and the US. Based on current market performance and taking catalysts into the equation, the analysts estimate that “Michelin are 20 per cent above consensus, while for Goodyear we are 15 per cent below the street.” As a result Cooper Tire shares are described as the firm’s preferred stock in North America, while in Europe, the bankers recommended Michelin and Pirelli over Continental and Nokian.

Here’s how the analysts explained their reasoning: “The survey data bolstered our confidence in industry margins: Inventories are far from overstocked levels, pent-up demand is just being released and price increases are sticking above our expectations. Michelin has a prime market positioning in Europe, and these findings removed the concerns that had informed our previous underweight stance. Our new pricing assumptions were the main driver of our 40-50 per cent earnings per share upgrade for Michelin.”

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