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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 main European stock markets were down in the week from the 20th to the 24th of May, 2013 (Milan -4%, London -1%, Frankfurt -1.1%, Paris -1.1%, Madrid -3.7%), after more than a month of gains brought indices to their highest levels since June 2008. Concerns mounted that the Federal Reserve may scale back Quantitative Easing in one of its next meetings and preliminary Chinese PMI data disappointed, showing that manufacturing activity contracted during the month of May.

Auto & Parts stocks were in negative territory in line with overall equity markets; sector index posted a -2.4% decline during the week but is still up 9.1% in 2013, mostly thanks to mass OEMs stocks recovering from their 2012 lows.

Pirelli closed the week at 8.53€, down 1.6% before dividend payment, with an average daily volume of 1.7 million shares (monthly average is 2.7 million).
In its London roadshow feedback report, Bank of America – Merril Lynch analyst confirmed Target Price (9.7€) and rating (“Buy”) on the stock. Societe Generale revised down its recommendation to “Neutral”, given Pirelli’s recent stock outperformance (+19% over the last month) which limited upside potential. According to both analysts, improving market volumes and supporting raw material input prices should positively impact 2013 targets achievement.

Target Price is slightly up at 9.18€, with 78% of analysts advising to “Buy” or “Hold” Pirelli shares.


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PEERS & MARKETS

Another strong week for European financial markets rising for the fourth consecutive week (Milan +1.9%, London +1.5%, Frankfurt +1.4%, Paris +1.2%). Stocks trading was supported  by positive macroeconomic data from the U.S. (April retail sales +0.1% vs. -0.3% expected, consumer confidence in May 83.7p vs 77.9) and China where industrial production grew 9.3% in April compared last year. In Europe, the German GDP was back to growth quarter-on-quarter in the first three months of 2013 (+0.1% yoy, -0.7% the previous result).

European Auto&Parts index achieved a weekly rise of 6.9% following data on April car registrations in Europe back to positive growth after 19 months of decline (+1.7% yoy). Market figures from Michelin and Pirelli positively impacted

Tyre related stocks benefited also from tyre market figures released by Michelin and Pirelli which show improvements in European demand and confirm the solid demand in Latin America.

Pirelli ended the week at 8.98€ (before coupon detachment) with an increase of 3.2%. Average daily traded volumes was about 2.5 million.


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PEERS & MARKETS

The main European stock markets were up in the week from the 6th to the 10th of May (Milan +2.1%, London +2.5%, Frankfurt +1.9%, Paris +1.0%), reaching the highest levels since June 2008 (Stoxx 600). Investor optimism was supported by better than expected economic data (German industrial production +1.2% in March, Chinese export +14.7% in April) while efforts to stimulate growth through monetary easing continued: Australia and South Korea trimmed their benchmark interest rate by 25 bps in the week (taking rates to 2.75% and 2.5%, respectively).

Auto & Parts stocks advanced in line with the overall market (Stoxx A&P +0.8% in the week), with tyre companies gaining almost 3 percentage points. According to broker Morgan Stanley, good Q1 2013 results by tyre makers eased investor concerns about industry pricing, given the current environment of falling raw material input cost and soft demand.

Pirelli shares were up strongly in the week (+6.1%, closing at 8.7€). Daily average trading volume totaled 3.8 million shares, 10.3 million on the day following the presentation of Q1 2013 results (Pirelli closed +7.3% on that day). Results were in line with market expectations and showed an industry-leading growth in volumes (+3.9% thanks to Pirelli’s exposure to emerging markets and the Premium segment) as well as the benefits of a distinctive positioning in the Industrial business (profitability was up 50% yoy). Pirelli confirmed the 2013 targets announced in March.


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