The main European stock markets were up in the week from the 21st to the 25th of May 2012 (Milan +0.8%, London +1.6%, Frankfurt +1.1%, Paris +1.3%), after G8 leaders said they are ready to take the “necessary steps” to aid growth.
Bank stocks rebounded (+2.2%), after being down 9.8% over the last month.
Pirelli closes the week at €8.03, down 6%, in line with Nokian. The year-to-date overperformance of the tyre sub-sector (+31% vs Stoxx 600), together with uncertainties over the economic outlook, prompted Goldman Sachs to turn more cautious on tyre stocks in the short term. The broker confirms its positive stance on Pirelli: solid fundamentals and appropriate strategy which will allow the achievement of 2012-2014 targets. The revised target price on the stock is €13.5 (previous was €13.7) – the second highest in the coverage – with a Hold rating. Differently from other brokers, Goldman Sachs adopts a relative rating within the whole Auto & Parts sector: according to this methodology, Pirelli – which gained 30% since the beginning of the year – provides a lower upside if compared with other stocks in the sector (Pirelli +60% vs. +160% Faurecia).
Pirelli Investor Relations