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.