A Look At Michelin (ENXTPA:ML) Valuation After Strong 2025 Cash Flows And €2b Share Buyback Plan

Simply Wall St

Sun, February 15, 2026 at 8:11 AM GMT+9 4 min read

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Compagnie Générale des Établissements Michelin Société en commandite par actions (ENXTPA:ML) is back in focus after reporting 2025 segment operating income of €2.9b and free cash flow before M&A of €2.1b, alongside a planned €2b share buyback.

See our latest analysis for Compagnie Générale des Établissements Michelin Société en commandite par actions.

The solid 2025 cash generation and the planned €2b buyback appear to sit alongside a positive price trend, with a 30 day share price return of 14.48% and a year to date share price return of 20.31%, while the 5 year total shareholder return of 38.36% points to momentum that has built over a longer horizon.

If this update has you thinking about where else capital might work hard, it could be a good moment to scan 102 top founder-led companies as potential fresh ideas for your watchlist.

With €2.9b in segment operating income, €2.1b in free cash flow before M&A and a planned €2b buyback on the table, is Michelin still trading at a discount, or is the market already pricing in future growth?

Most Popular Narrative: 10% Overvalued

With Michelin at a last close of €34.48 versus a narrative fair value of €31.35, the current price sits above what that popular view considers reasonable, while still building its case on fairly modest growth and margin shifts rather than aggressive blue sky assumptions.

Recent restructuring and optimization of Michelin’s manufacturing footprint, including plant closures and streamlining, is set to deliver a significant €200 million annual benefit to margin and efficiency, with the full impact expected to materialize in H2 2025 and beyond as volumes recover, supporting margin expansion and free cash flow.

Read the complete narrative.

Curious what kind of revenue glide path and profit margin step up are baked into that fair value, and how long they are assumed to last? The narrative leans on a specific earnings ramp and a lower future earnings multiple than today to square the circle between cash flow, growth and price. If you want to see exactly how those moving parts fit together, the full storyline puts precise numbers on each of those levers.

Result: Fair Value of €31.35 (OVERVALUED)

Have a read of the narrative in full and understand what’s behind the forecasts.

However, there are still clear pressure points, with raw material cost swings and tougher low cost competition both having the potential to challenge those margin and earnings assumptions.

Story Continues  

Find out about the key risks to this Compagnie Générale des Établissements Michelin Société en commandite par actions narrative.

Another Angle, Same Company

While the most popular narrative points to Michelin looking about 10% overvalued versus a fair value of €31.35, our DCF model presents a very different picture, with a future cash flow value of €70.11 per share. When one approach suggests it is expensive and another suggests it is inexpensive, which lens do you trust for your own work?

Look into how the SWS DCF model arrives at its fair value.

ML Discounted Cash Flow as at Feb 2026

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Compagnie Générale des Établissements Michelin Société en commandite par actions for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 229 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Compagnie Générale des Établissements Michelin Société en commandite par actions Narrative

If you are reading this and feel the story should look different, you can stress test the numbers yourself and shape a custom view in minutes, then Do it your way.

A great starting point for your Compagnie Générale des Établissements Michelin Société en commandite par actions research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

Looking for more investment ideas?

If Michelin is already on your radar, do not stop there. The same effort can surface a broader set of opportunities that sharpen your overall portfolio picture.

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_ This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned._

Companies discussed in this article include ML.PA.

Have feedback on this article? Concerned about the content? Get in touch with us directly._ Alternatively, email editorial-team@simplywallst.com_

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