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Investor Channel is the communication channel between Pirelli and the financial community. Analysts, shareholders and web users can use the channel for direct dialogue with the Group. The blog is moderated by Pirelli Investor Relations.

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PEERS & MARKETS

The 18 to 22 October week was good on all the major Europan markets (Milan +2.3% London +0.7% Frankfurt +1.7%).
The decision taken by China to raise their official interest rates caused a  few initial uncertainties with markets on the upside following the many recent three-month financial reports reviews with data better than expected both in Europe and the US (Nokia, Basf, Bayer, Bic, Schneider Electric, Apple among others).
The Auto&Parts sector is up (+3.4% European reference index, best industry performance of the week) due to the positive sentiment expressed for the industry as well as good FIAT  (+2.9%) and Renault (+8.9%) three-month results.  Also the Industrial is up: +2.4% EURO STOXX index. Still a top week for Pirelli with 6.175 euros closing (value net from Pirelli RE stock distribution) with a + 3.0% performance.  This is in line with the volume average of approx. 3.5 million units traded. This makes it the best performer on the Mib FTSE with a plus 41 opp. since  the beginning of this year.
TP reviews keep on being on the raise with Centrobanca (7 euros – +71 euro/cent), Unicredit (7euros from 6.60 euros), Banca Aletti (7.5 euros from 6.7 euros) and Centrosim (6.7 euros from 6 euros) after they issued their recommendations. The common drivers for upgrades were the review on the Tyre estimates, very good positioning compared with competitors, growing exposure on the emerging markets and the positive sentiment on the disclosure of the new Industrial Plan on November 4.
While focusing on the core business, analysts gave a positive assessment to the dismissal of the Broadband which together with the split between Pirelli & C and Pirelli RE (hereafter PRELIOS) will cause the removal of the holding discount from the stock value.
The consensus TP is worth 6.88 euros with 78% recommendations to BUY. 
The major European peers are being challenged: Michelin +3.2%, Continental +4.5%, Nokian -0.5%.


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PEERS & MARKETS

The principal financial markets were up at the end of the week 11 to 15 October  (Milan +1.5%, London +0.8%, Frankfurt +3.2%, Paris +1.7%) buoyed by the prospect of new measures from the Federal Reserve to stimulate the economy.
At sector level, the highest price rises were in the Industrial (+3.3%) and Auto & Parts (+3.9%) sectors.
Pirelli shares performed particularly well, confirming their position among the best stocks on the market. +6.6% to €6.39. Pirelli outperformed the FTSE MIB (+5.1pp) and the European reference index for the industry (+2.7pp vs DJ STOXX Auto&Parts) once again claiming the position of best Blue Chip share of the week (+47.7pp YTD). Mean trading volumes were steady at around 5 million trades.
After the upgrade of the guidance on the full year 2010, 7 brokers (Intermonte, UBS, Chevreux, Equita, Banca Akros, Banca Leonardo, Exane) raised their valuation of Pirelli by an average of €0.07 with a Target Price di €7 . For Intermonte (Outperform a €7.60) Pirelli was able to bridge the gap in value compared to its peers thanks to a continued focus on tyres, and deserves to be traded at premium, given its business positioning. For UBS (BUY at €7) Pirelli’s positive momentum continued, with the presentation of a new industrial plan that is expected to provide good indications for future operational trends, disposals and the efficiency plan.
This was in contrast with its principal European peers: Michelin +4.4%, Continental +6.8%, Nokian -0.6%.
Pirelli RE closed the week at € 0.434, a fall of 7.6%.


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PEERS & MARKETS

Major international stock markets ended the week in positive territory  (Milan +1.8%, London +1.2%, Frankfurt +1.3% and Paris +1.9%) reflecting positive macroeconomic newsflow: official rates near zero in Japan and unchanged for ECB (1%) with positive indications on the condition of global financial institutions from ECB and IMF. The European Auto & Parts sector increased by 1.1%.
Pirelli ends the week positively by 0.7% at € 5.995 after reaching new highs on October 7th (€6.05). The stock is once again confirmed as the best performer on the FTSE Mib +40.5pp YTD. Volumes in line with the last 3 months: 3.5 million trades. Unicredit reaffirmed its BUY recommendation on the stock, raising the TP to €6.6 (from €6.1). The positive turn in the sector and Pirelli’s strategic position compared to its peers, particularly on emerging markets, have led to a review on the companies forecasts: Ebit margin tyre 2010E 8.5% (Ebit € 397 mln ), 9% 2012E (Ebit € 449.7 mln ). Centrobanca confirms positive forecasts (TP €6.29, BUY recommendation) considering Pirelli as a least risky stock of the international sector.
Major European peers ended the week with a mixed result: Continental -0.6%, Nokian +1.7%. Michelin recovered partial losses (-15.05% from the previous day before the share capital increase announcement) ending the week with a +2.7% performance.
Pirelli RE continues its positive trend ending the week at 0.47 increased by 6.7%: remaining the only positive stock from the sector along with IGD (+8.3%)


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1 - 3 of 5 October, 2010