French tyre maker Michelin saw its shares tumble 11% to €25.53 shortly after the European market opened on Tuesday, October 14, marking the steepest intraday drop in recent years. The decline followed a guidance cut by the company, which cited worsening market conditions and a sharp fall in North American sales.
The French company now expects 2025 segment operating income in a range between €2.6 billion and €3 billion at constant exchange rates, down from a previous target of more than €3.4 billion.
Despite year-on-year volume growth in the third quarter, the company said its results had been dragged down by the North American business, where sales fell by close to 10%, with competitiveness “impacted by tariffs.”
Michelin’s warnings come as many carmakers face sluggish demand in Europe, fierce competition from Chinese rivals, and the impact of tariffs on exports to the U.S.
North America is Michelin’s top market, and while it produces tires locally, avoiding a direct impact from U.S. tariffs, the company is seeing a knock-on effect from weaker car sales, as automakers were forced to hike prices and customers became more cautious in the volatile environment.
The company also said that it had lowered its expected free cash flow before M&A to between €1.5 billion and €1.8 billion, down from more than €1.7 billion, due to the weaker dollar. The weaker U.S. dollar had also been a headwind, it noted.
Though the guidance cut was expected by analysts, it came deeper than their expectations, resulting in target price cuts. While the outlook cut was anticipated, it was “worse than feared,” Citi analyst Ross MacDonald wrote in a note. The firm is set to publish its third-quarter results on October 22.
Biggest intraday crash in five years
Tuesday’s sharp intraday crash marked the steepest decline in the last five years, pushing the stock down 15% so far in October. This extended its losing streak to the fifth straight month and sent shares to levels last seen in July 2023.
Year-to-date, the shares are down 18% in 2025, and analysts see no near-term recovery, having slashed target multiples due to the sharp drop in North American sales.
(With inputs from agencies)
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