Shares of Michelin and Nokian Tyres advanced on Tuesday after JPMorgan upgraded ratings and lifted price targets, citing margin expansion and strategic execution in their respective markets.
Michelin’s stock rose 1.6% in Paris trading after JPMorgan upgraded the company to Overweight from Neutral and raised its price target to €42 from €35. The upgrade follows expectations that Michelin’s Polymer Composite Solutions unit will drive growth, with first-half 2026 revenue increasing 14% and an operating margin of 13.6%. The unit’s expansion, supported by acquisitions of Cooley Group and Tex Tech Industries, contributed roughly 20% to its revenue base. JPMorgan’s valuation assumes Michelin reaches a segment operating margin of about 12% by 2027, applying a 1.2x EV/Sales multiple for that year. Management also targets more than €1.6 billion in free cash flow in 2026 and up to €2 billion in buybacks through 2028, though net gearing rose to 26% in the first half of 2026 due to M&A activity.
Nokian Tyres surged nearly 7% in Helsinki after JPMorgan moved the stock to Neutral from Underweight and raised its price target to €15 from €7.70. The upgrade reflects a 17%, 38%, and 43% increase in JPMorgan’s 2026–2028 operating profit estimates, respectively. The analyst cited growth in premium winter, all-season, and agricultural tyres, as well as larger rim sizes. Nokian’s new manufacturing plants in Romania and Dayton, Ohio, now cover about 85% of U.S. demand. However, JPMorgan noted it will require further evidence of execution against 2029 targets and a reduction in net debt/EBITDA below 2x before adopting a more bullish stance.
JPMorgan maintained Continental at Overweight and Pirelli at Neutral, following a prior downgrade for the latter. The upgrades for Michelin and Nokian Tyres come amid divergent demand trends in the truck tyre segment, with European truck replacement demand up 9% year-to-date while U.S. original equipment demand declined 12% over the same period.
