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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The main European stock markets were slightly up in the week from the 24th to the 28th of February, 2014 (Milan +0.2%, Frankfurt +0.4%, London -0.4%, Paris +0.6%, Madrid +0.4%). On a positive note, the EU revised its 2014 Eurozone GDP growth estimates: +1.2% yoy vs +1.1% forecasted in November; improved outlook for Germany (+1.8% vs +1.7%), France (+1% vs +0.9%) and Spain (+1% vs +0.5%), whereas Italy’s growth is expected down to +0.6% (+0.7% previously). European unemployment in January was in line with expectations at 12% (stable vs December), and the US purchasing manager confidence surprised on the upside. Volatility was up sharply towards the end of the week, as political tension kept rising in Ukraine causing today’s sell-off in equity markets.

Auto & Parts stocks were down in the week (-1% vs Stoxx 600 +0.6%), weighted down by large-cap VW (-6%): the shares factor in the dilutive impact of the preference shares issued to finance the acquisition of Scania (6%/7% dilution according to broker Cheuvreux). Moreover, investors reduced exposure to those stocks most exposed to the Russian market (Renault -2.5%, Nokian -4.9%).

Pirelli shares were up 0.6% in the week, closing at 12.6€ with an average daily trading volume of 2 million shares (-20% vs 4-week average). The deal reached with Bekaert (disposal of steel cord business and long term supply agreement) was already discounted by the market; sector analysts viewed the deal positively, as it increases Pirelli’s focus on Premium tyres, with higher profitability, it reduces exposure to a volatile business (steelcord is mainly a truck tyre component), and it has a positive impact on net debt. Consensus target price stood at 12.04€ with 74% of analysts advising to buy or hold the shares.

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