PEERS & MARKETS
The auto sector showed a positive trend for the week of October 12 – 16 with Pirelli among the best performers (with a 5.5% increase at 0.42 per share compared to the 2.6% increase of the DJ Stoxx Auto index). Morgan Stanley initiated coverage on Pirelli (“Maestro of Tyres from Italy to Brazil“) with an “Overweight” recommendation and target price of €0.45. There are several factors that make the stock attractive: guidance on the sustainability of the industrial plan does not completely reflect consensus forecasts, the presence in high-growth markets like in Brazil and reduced risks linked with Pirelli Real Estate after its increase in share capital.
Banca Aletti also gave a positive recommendation on the stock, publishing the first report on Pirelli this week with an Outperform recommendation and target price of €0.48.
Average ratings of stock analysts on Pirelli settle at €0.39; a “BUY” rating prevailing on coverage made by 18 business banks.
The week also ended in positive territory for the European tyre sector with a 4.5% increase for Michelin and 3.9% for Continental.
Pirelli RE ends the week at € 0.665, a 1.7% decline, however outperforming companies from the Italian real estate sector (Gabetti -7.1%, Aedes -6.4%, IGD +9.3%, Risanamento +2.9%).
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Categories: Investors Peers & Markets Pirelli Pirelli RE
In order to support small and mid-size companies from the transportation sector during this critical economic turndown, Pirelli has launched a benefit package along with the Bnp-Paribas ‘Credityre’, which associates the purchase of Pirelli Truck tyres with banking services (current accounts and financing), including financial and insurance services specially studied for the transportation industry and tyre resellers. ‘Credityre’ offers short term and long term financing in addition to offering the chance to opening a free of charge current account and draw-up loan repayment insurance to protect customers against unforeseen events, it includes customisable conditions depending on the size and need of each company.
International markets end the week on a positive note, an average increase of 4 percentage points, particularly for the European Auto & Parts sector (+7.4%) and for the Basic Resources sector (+10%). The rally was mainly due to the quarterly results of US aluminum giant Alcoa, which beat market expectations by far. Pirelli is among the top companies from the Milan Stock Exchange, ending the week in positive territory by 12.7% at € 0.398, significantly outperforming the index sector (+5.3%) as well as the Italian blue-chip index (+7.8 %). Pirelli continues to be upgraded: during the week, Banca Akros raised its target price on the stock to € 0.49 (from 0.42) confirming a “Buy” rating. TP’s review is mostly linked to Pirelli Tyre, which is now being evaluated by Banca Akros’ financial analyst, applying the same market multiples as Michelin.