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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 from June, 17 to 21 was a difficult one for major European stock markets (Milan -5.6%, -3% London, Paris -3.9%, -4.2% Frankfurt, Madrid -4.6%) driven downwards – after the first positive sessions – by the Governor of the Federal Reserve words: due to some signs of improvement in the U.S. economy, Quantitative Easing in the U.S. will be gradually reduced and ended during next year. The news caused a broad sell-off on the markets that struck indiscriminately all sectors.

Bank shares was among the most affected (Stoxx Bank -5.2%) together with European Auto&Parts stocks (-7.1% Stoxx Auto), following poor data on European registrations in May (-5.9% yoy, the smallest since 1993 ) and profit taking after one of the best sector performance year to date (+8.3% YTD last week).

Pirelli ended the week in line with the main Tyre peers at € 8,875 (-4.3%) with an average trading volume of about 2.7 million pieces.

Categories: Pirelli Pirelli Tyre


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PEERS & MARKETS

The main European stock markets were down in the week from the 10th to the 14th of June 2013 (Milan -3.2%, London -1.6%, Frankfurt -1.5%, Paris -1.7%), bringing year-to-date performance to +4.1% (Stoxx 600 Europe index). Investor sentiment was affected by the Central Bank of Japan unexpectedly deciding to not strengthen the liquidity injection in the market ($620 bln per year), failing also to introduce new instruments to limit government bonds’ volatility. During the week, moreover, the World Bank downgraded its global outlook bringing 2013 growth to +2.2% (January estimate was +2.4%), lower than the 2.3% achieved in 2012. Expectations on emerging markets were lowered (China +7.7% vs previous 8.4%, Brazil +2.9% vs 3.4%, India +5.7% vs +6.1%), and the Eurozone is now expected to contract by 0.6%.

Auto & Parts stock retreated (sector index -2.8%), with the main auto OEMs down by more than 4% on average. At +8.3%, the sector is still the third best performer among European equities in 2013.

Tyre stocks outperformed the sector, thanks to May market data pointing to a possible recovery in the European replacement market and a still buoyant South American market.
Pirelli closes the week up +3.2% at 9.27€, with average daily volumes at 3.2 million shares (approximately +20% vs 1 month average). Consensus target price stood at 9.4€ with 82% of analysts with a positive view on the stock (“Buy” and “Hold”).


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PEERS & MARKETS

The main European stock markets were down from the 3rd to the 7th of June 2013, for the third consecutive week (Milan -3%, London -2.6%, Frankfurt -1.1%, Paris -1.9%, Madrid -0.6%). Concerns continued that the Federal Reserve might soon scale back its bond-buying program and the ECB governor confirmed that no unconventional stimulus measures are in the agenda for Europe. According to the European Central Bank, moreover, growth in the region is expected to return no earlier than year-end 2013; the benchmark interest rate was kept at 0.5%.

Auto & Parts stocks retreated by approximately one percentage point (Stoxx Auto & Parts -0.9%). German automakers underperformed the index, on the news that Chinese authorities could impose duties on imports of large cars (engines above 2 liters). Additionally, after having recorded growth in April (+4% yoy) the German car market contracted in May (-9.9% yoy).

Pirelli shares were up 0.4% in the week, closing at 8.98€ thereby making up for the dividend payment (0.32€ per share). Daily average trading volume was at 3.2 million shares, or 20% above the average of the last 30 days. Broker Intermonte published an update on the stock and upgraded the recommendation on from “Hold” to “Buy”. According to the analyst, the new shareholder structure marks the beginning of a new phase of the equity story, and the stock should benefit in the short term from a recovery of the European tyre market as well as stabilizing consensus estimates. Additional valuation upgrades came from HSBC (Buy, TP from 10€ to 11€) and KeplerCheuvreux (Hold, TP from 8.5€ to 9€). Pirelli Target Price stood at 9.4€ (+15% vs market price) with 83% of analysts advising to “Buy” or “Hold” the stock.


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