The main European stock markets were down in the week from the 7th to the 11th of April, 2014 (Milan -4.4%, London -2%, Frankfurt -3.9%, Paris -2.6%, Madrid -4.4%). Particularly hit were the technology (-4.1% on worries that current valuations might be stretched) and the financial sector (-4.3% due to the weak start of the Q1 US reporting season). The contraction of Chinese exports in March (-11% yoy, expectations of +3.9%) was cause for further concern.
Auto & Parts stocks traded in line with the market (sector index -3.9%). Mass OEMs outperformed: Volkswagen (up +1.4% in the week following positive sales data in March, especially in Europe and China), Fiat (+0.4%) and Renault (flat).
Pirelli shares closed at 11.52€ (-2.3%) outperforming the European peers. Average daily trading volume was 3.7 million shares, in line with 3-month average.
According to commentary by broker KeplerCheuvreux, the conversion of the “convertendo” into Prelios shares was widely anticipated by the market; according to the analyst, moreover, investor mood on tyre stocks is improving, thanks to an attractive valuation and relative underperformance in the past 15 months (vs Auto stocks).
Consensus target price was unchanged at 12.64€ with 81% of analysts recommending to buy or hold the shares.