The main European stock markets were down in the week from the 15th to the 19th of April, 2013 (Milan -0.1%, London -1.5%, Frankfurt -3.7%, Paris -2.1%, Madrid -1.6%). Investor worries were linked to renewed uncertainties on global growth, after the IMF revised global GDP forecasts downwards: the world economy is now expected to expand by 3.3% in 2013 (previous estimate was 3.5%) and 4% in 2014 (confirming previous data). Moreover, the pace of economic activity in China disappointed, with GDP up 7.7% in Q1 2013 (versus estimates of +8%) mostly due to lower industrial production and exports to Europe, the United States and Japan.
Auto & Parts stocks retreated during the week, with the Stoxx A&P index declining by 4%. In anticipation of the forthcoming reporting season, Morgan Stanley advised to reduce exposure to the sector and in particular to those stocks most at risk of revising 2013 guidance downwards and having lower growth prospects. The European car marked proved continued to contract during the month of March, to the tune of -10% yoy. According to Sanford Bernstein, moreover, a weaker Yen and a slowing Chinese car market could imply little room for 2013 profitability improvement for the European Premium car makers.
Pirelli closed the week at 7.37€, advancing by 0.3% after an average trading volume of 3.5 million shares per day. During the week, broker Intermonte revised its stock rating upwards from “Neutral” o “Outperform”, noting that the current stock price represent an attractive entry point and already discounts investor worries on the tyre sector.
Consensus Target Price stood at 9.3€, with 75% of analysts advising to “Buy” or “Hold” the stock.