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.