The week from May 27 to 31 was a mixed one for major European stock markets (Milan +1.9%, London -1.7%, Paris -0.2%, +0.5% Frankfurt, Madrid +0.7%). The positive U.S. macroeconomic data (consumer confidence in May to the highest level since February 2008, first quarter GDP growth of 2.4% QoQ) drove upward stock prices in the early sessions of the week but caution prevails among operators waiting for more visibility on the evolution of the Fed monetary policy: the U.S. Central bank may stop the current Quantitative Easing in light of the positive economic data.
European Auto&Parts stocks continued to rise last week gaining 3.1%: according to Morgan Stanley, the sector benefited last month from sustained purchases by investors (+11.8% the performance of the European index; +10.4 pp vs. DJ Stoxx 600) following the prospects of a recovery in the second half of 2013. An important signal will be given by the forthcoming publication of May car registrations data.
Pirelli ended the week at € 8,945, a rise of 4.9% with an average daily trading volume of around 1.8 million. Goldman Sachs has revised the recommendation on the stock to Neutral (from Sell) and the target price to € 9.8 from € 7.6: the increase in valuation reflects the reduction in the cost of capital and the revision of the estimates on profitability; the positive view on the sector was confirmed. The consensus target price stands now at € 9.3 with 40% of the coverage with a Buy recommendation.