The worsening crisis in Libya and the consequent increase in oil prices above 111 dollars per barrel have led to a fall in international stock markets for the week of February 21-25 (Milan -3.1%, London -1.3%, Paris -2.1%, Frankfurt -3.3%).
Heavy losses have hit almost all sectors without distinction; in particular the bank sector which reflected a lost of 3.5%, industrials 2.8% whereas the Auto & Parts sector lost 3.3%.
Pirelli ended the week at €5.8 (-3.7%) in line with the market sector; however, volumes were slightly lower than the daily average compared to the previous month. New coverage initiated on Fidentis with a TP of €7.3 and a BUY recommendation. According to the broker, the profitable target prices disclosed by Pirelli based on the Industrial Plan are achievable despite the recent rise in prices of raw materials; in 2011 Pirelli will be capable of improving its own prices in line with major business of the sector thereby guaranteeing an EBIT margin of 9%. A further potential upside driver for the stock consists of the entrance to the Russian market; option valued at €0.45 per share and is not currently included in the stock assessment.
The consensus target price settles at €7.05 with a solid Buy recommendation.
Other stocks of the European tyre sector also reflected losses: Continental -5.8%, Nokian -3.7%, Michelin -1.7%
Categories: Peers & Markets