Shares of Michelin fell modestly on Tuesday morning following a disappointing earnings report and cautious outlook from Goodyear Tire and Rubber Co. In midmorning European trade, Michelin was down 0.3%, while fellow European tyre makers recorded small gains - Italy's Pirelli rose 0.4% and Germany's Continental advanced 0.2%.
Analysts at Citi highlighted the variation in U.S. exposure across the three European manufacturers, describing Michelin as the "most exposed" to the U.S. market among them. Citi's team noted Michelin has "sizeable exposure to the still weak U.S. truck market, albeit more diversified across regions versus Goodyear." The bank added that any negative read-through to Michelin's shares from Goodyear's results "should not take shares more that 2% lower today."
Citi also flagged Pirelli as the least exposed of the trio, in part because it does not have meaningful exposure to U.S. truck demand.
The immediate market reaction followed Goodyear's premarket weakness in the United States, where its shares tumbled by more than 8% after reporting fourth-quarter earnings per share of $0.39 versus Bloomberg consensus estimates of $0.49.
Wolfe Research analysts pointed to Goodyear's implied outlook for the current quarter, which they said was driven by an expectation that global tyre volumes would fall about 10% year-on-year due to an "industry inventory build-up and adverse weather." Wolfe Research further noted that Goodyear did not provide a quantified volume forecast for fiscal 2026. Based on the company's other annual assumptions, Wolfe said Goodyear "would need to be able to bring its volumes back to flat year-on-year for 2026 or announce new deep cost savings" for segment operating income to be comparable to 2025 and for free cash flow to be "just above breakeven."
The cross-border sell-off and analyst commentary underscore how a single large supplier's results and forward guidance can affect peers with differing regional exposures and product mixes. For investors and market participants focused on automotive suppliers, tyre makers and truck-related demand, the interplay of inventory levels, adverse weather and regional market weakness has emerged as a focal point.
As the trading day progressed, market participants will likely continue to assess how much of Goodyear's operational and volume-related concerns are idiosyncratic to that company versus indicative of broader sector dynamics that could influence producers with greater U.S. truck exposure.