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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

Negative week for the major Stock Exchanges, between the 21st and 25th of October  (Milan -2.1%, London +1.5%, Frankfurt +1.4%, Paris -0.3%, Madrid -1.9%). The lists were affected by the new ECB parameters for “asset quality review”, the mechanism with which European banks’ credit balance are to be assessed  (DJ Stoxx Banks -1.3%, among the sectors more in the storm).
The European Auto&Parts Industry is doing fine, +1.0%, with Pirelli amongst the best performers. After reaching their highest value of 10.66€, its stocks closed the week at 10.48€, with an increase of 2.7%. From the beginning of this year, Pirelli has gained 21.1%, +5.1 pp compared to FTSE Mib.. Unchanged the consensus target price at 10.4€, with 82% of analysts giving a positive rating of Pirelli shares (Buy+Hold).


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PEERS & MARKETS

The main European stock markets recorded the second consecutive week of gains from the 14th to the 18th of October, 2013 (Milan +2.1%, London +2.1%, Frankfurt +1.6%, Paris +1.6%). Investor sentiment was sustained by the end of the 16-day long shutdown of the US Federal Government (2014 budget negotiations will continue until December 13). Positive news, moreover, came out of China with GDP growth accelerating to the tune of 7.8% yoy in Q3 (7.5% in Q2 2013).

Pirelli shares closed the week at 10.2€ (-1.2%) with an average daily trading volume of 1.5 mln shares (-20% vs 3-month average).
In its Q3 reporting season preview, broker Deutsche Bank confirmed the positive view on suppliers (tyre and parts) on the back of stabilizing European vehicle sales; investors will focus, additionally, on the impact of foreign exchange volatility. Depreciation of South American currencies, together with the recent share price rally, prompted broker Natixis to revise down its recommendation on Pirelli shares (Neutral from Buy), keeping the valuation at 10 euro per share. Consensus target price stands at 10.3€, with 82% of analysts recommending to Buy or Hold the shares.


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PEERS & MARKETS

Major international financial markets ended down the week from October 7th to October 11th (Milan +3.2%, London +0.5%, Frankfurt +1.2%, Paris +1.3%, Madrid +2.6%) waiting for the outcome of the debate on U.S. debt ceiling, after the Republic party has formalized to Obama the request of raising it in the short-term (for 6 weeks), so to end the “shutdown”.
Better than the market the Auto&Parts sector stocks (sector index +2.0%, Blue Chips Europe Stoxx 600 +0.6%). According to preliminary September tyre shipments data released by the RMA (Rubber Manufacturers Association), demand trend is rising: Total US tyre shipments tracked +8% YoY, +18% in total OE shipments.
Pirelli shares closed the week at €10.32 (+6.7%) with an average daily volume of 3.0 million shares. Upgrade from Mediobanca: Outperform with a target price of €12.0 (from €8.0) on the medium/long term outlook (EBIT margin of 16/17% expected). Broker Bank of America upped the stock’s valuation as well (Buy, TP +1.1€ at 11.8€), thanks to improved sector multiples (EV/EBITDA ‘14E from 5.4x to 5.6x). Consensus Taget Price stands at €10.3 with 82% of analysts recommending to Hold or Buy Pirelli shares.


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