The week 20-24 September was a positive one for the international markets (Milan +0.4%, London +1.6%, Paris +1.6%, Frankfurt +1.4%). Trading received a boost from the positive macroeconomic data in the US (new home sales +7.6% in August, guide index +0.3%) and Europe (industry orders +11.2% since the start of the year).
At sector level, the highest rises were in Auto & Parts (+3.3%) and Industrial shares (+2.0%).
Pirelli closed the week at €5.98, a rise of 2.8%. Trading in Pirelli shares was up, with mean daily volumes of almost 4 million trades, compared to the roughly 3 million of the previous weeks. The stock was buoyed by the positive opinion of the analysts with Banca IMI who, given the new industrial plan presented by the company, categorised it as special situation (NAV at €7.6, compared to the previous €6.9) and Royal Bank of Scotland (RBS),which started the coverage with a BUY recommendation and a TP at €7. According to RBS favourable geographic positioning, combined with an improved product mix and the price increase will allow Pirelli to achieve an Ebit margin of over 10% by the end of 2012. For Morgan Stanley, however, all the positive catalysts on the share have already been discounted by the market, and their opinion is Underweight, but with a TP of €6.20 instead of the earlier €5.72.
The Consensus TP for Pirelli is €6.31 (Buy the prevalent recommendation: 79% of the coverage).
Pirelli again confirmed its status as the best share in the FTSE Mib basket, with a relative performance +40.8 percentage points higher than the FTSE Mib.
A slight downturn in the weekly performance of Pirelli RE, which closed at €0.44 (-0.8%).