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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 week of July 18th has been a positive one for major international markets (Milan +5.5%, London +1.6%, Paris -0.7%, Frankfurt +1.5%). After starting with a strong downswing, listings benefitted from the EU decision to relaunch the new bailout plan for Greece, by also involving private financial institutions.

Strong buybacks in the banking industry posted the best European performance: +5.7%, the reference Stoxx.

Sales in the tyre Industry: June and second quarter market data marked a slowdown in sales volumes compared to the first quarter of 2011. Major stocks underwent a downturn: Continental -3.5%, Nokian -3.2%, Michelin -2.8%. Pirelli, the best equity in the industry from the beginning of the year, closed the week at 7.25€ (-5.3%). Pirelli shares were upgraded by Exane, whose rating went from Neutral to Buy and a 9.7€ TP, and by Centrobanca, Buy and 9.5€ TP. Merrill Lynch took another view and started buying Pirelli when it was rated Underperform, with a 7€ Target Price. According to the latter broker, Pirelli overperformed the industry and its main peers in the last two years, because of an “appealing restructuring story” and a sound “earning generation”. The company can also count upon a strong brand, an efficient cost structure, robust pricing power and “an experienced management team”. The broker’s view of 2011-13 plan targets is again different: the growing competition in LatAM, as well as in Europe, could hinder the company’s ability to increase its profitability.

Pirelli average consensus Target Price is of 8.54€ with 96% of brokers buying the security at Buy rating.



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HAMILTON TAKES HIS SECOND WIN OF THE YEAR AT THE NÜRBURGRING

McLaren driver Lewis Hamilton has claimed his second victory of the 2011 season and the 16th of his career at the German Grand Prix, taking his first-ever points finish at the legendary Nurburgring after a thrilling 60-lap race that featured several intense battles for the lead. Ferrari driver Fernando Alonso was second, ahead of Red Bull Racing’s Mark Webber – who started from pole – in third.

The top three all stopped three times in total and used the same strategy of three initial stints on the soft tyre and the final stint on the P Zero White medium tyre. With the soft tyres expected to be more than a second a lap quicker than the medium tyres in the cool temperatures of 13 degrees centigrade, and a constant threat of rain, the drivers tried to stay out for as long as possible on the P Zero Yellow tyre, putting the emphasis on tactics.

 “The whole race hinged on tyre strategy – Pirelli’s motorsport director Paul Hembery commented – as we saw Hamilton, Alonso and Webber all try to use pit stops to their advantage. Although some people were thinking that there would be a big time gap between the soft and the medium tyre, Lewis Hamilton was able to win the race in style after being the first of the front runners to change onto the P Zero White tyre. We saw a wide spread of strategies once more, with two drivers even delaying their final pit stop until the very last lap. Because of the cool temperatures and smooth surfaces we saw the tyres lasting for a very long time here, which makes an interesting contrast to the early part of the year when some people said that our tyres weren’t lasting long enough!”. 

Categories: Formula 1 Pirelli


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PEERS & MARKETS

Fears about the stability of the euro continue to affect the trend in financial markets in the week 11-15 July (Milan -3.1%. London –2.5%, Paris -4.8%, Frankfurt -2.5%).

Pirelli bucked the trend of the Milan stock exchange and the Stoxx Auto (+6.6pp; +2.6pp) ending the week at €7.66, a rise of 3.7%. The shares, which have recorded growth of 26.5% since the start of the year, were also sustained by the Goldman Sachs upgrade of its TP to €11.0.  High pricing power and continuous improvement of its mix characterise the Pirelli equity story, according to the broker. The market is not ignoring potential growth in Pirelli’s profitability, predicting a group ebit margin of 9.9% in 2011 and 12.7% in 2013.



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