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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 up in the week from the 1st to the 5th of July 2013 (London +2.6%, Frankfurt -1.9%, Paris +0.4%, Madrid +1.4%, Milano +1.9%), supported by the central bankers of Europe and England pledging to keep interest rates at the current low levels. Positive news on the real economy came from the United States, where data from the manufacturing and the construction sectors surprised on the upside.

Auto & Parts stocks advanced in line with the overall market (sector index +2% during the week), thanks to the outperformance of French OEMs: according to Goldman Sachs, European light vehicle production should pick up in the third quarter on the back of improving consumer confidence, as confirmed by the reduction of stock witnessed in the distribution channels.

Pirelli closed the week up 0.7% at 8.96€ with an average daily traded volume of 1.7 million shares. In an update report, broker UBS confirmed its positive view on the stock (rating BUY) and improved the valuation to 12€ (+2€). According to the analyst, Pirelli’s cash flow generation potential is particularly attractive, given the positive outlook of the Truck business in South America, the expected reduction in capital expenditures as well as the improvement in net working capital management.
Average Target Price stood at €9.55 (+7% upside on Friday’s closing price), with 83% of analysts advising to Buy or Hold the stock.

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PEERS & MARKETS

The main European stock markets were up in the week from the 24th to the 28th of June, 2013 (London +1.6%, Frankfurt +2.2%, Paris +2.2%, Madrid +0.8%, Milan -0.1%). Investor sentiment was helped by positive commentary from several Federal Reserve officials, suggesting that investor concerns on the timing and magnitude of the reduction in economic stimulus have been excessive. In addition, the Chinese central bank avoided the risk of a credit crunch in local money markets, providing enough liquidity to stabilize short-term interest rates: after reaching a high 14%, the interbank interest rate went back to approximately 4.5%, close to 2013 average of 3%.

Auto & Parts stocks advanced during the week, with the European sector index posting a 4.8% gain led by auto stocks. Two German car producers announced to have reduced factory downtime in an effort to meet rising demand for newly introduced models, whereas preliminary data showed the French car market in Q2 2013 recorded only a limited reduction in sales volumes (-6% according to Deutsche Bank, vs -15% in Q1 2013).

Pirelli shares were flat in the week, closing at 8.90€ with an average daily traded volume of 2.2 million stocks. Growth potential coming from the company’s exposure to markets such as China and Latin America, together with the assumption of stabilizing pricing and volumes in Europe, led Exane BNP Paribas to upgrade Pirelli’s Target Price (+0.5€ at 10.5€), confirming a “Buy” rating.


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