Prices fell on the major international markets in the week from 23 to 27 May (Milan -1.9%, London -0.2%, Frankfurt -1.4%, Paris -1%), influenced by uncertainties about the Euro stability and the economic trend.
At sector level, more cyclical sectors were most affected, with industrial and technology shares down ( -1.7% and 2.4% respectively), while banking shares recovered (+0.5%).
Pirelli closed at €6.84 (+0.7%) bucking the trend in the sector (+0.8pp vs Stoxx Auto) and against the market (+2.6pp vs FTSE Mib) with average daily trading volumes of around 3.2 billion trades. The share, which has been trading ex-dividend since 23 May, benefited from the Kepler upgrade to €9.0 (from €7.6, Buy confirmed). The broker believes that the upside driver is the sustained demand at sector level, and Pirelli’s strong pricing power and exposure at premium segment. The consensus target price on a coverage of 22 brokers was €8.10 ( €7.6 before the 1Q2011 results) with 91% of commercial banks recommending purchase of the share.