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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

European stock markets were mixed in the week from the 12th to the 16th of May 2014 (London +0.6%, Frankfurt +0.5%, Paris -0.5%, Madrid -0.1%), as Eurozone GDP growth fell short of expectations: +0.2% as compared with Q4 2013, estimates of +0.4% growth. The Milan stock exchange underperformed (-3.5% in the week), after Italy’s GDP unexpectedly contracted (-0.1% vs expectations of +0.2%). Concerns over the pace of recovery of the European economy led investors to reduce exposure to the most cyclical sectors: media -2.2%, travel and leisure -3.3%, construction -1.9%.

Auto & parts stocks were down approximately 1.5 percentage points, mass OEMs in particular. According to data published by ACEA, car sales growth in Europe is slowing down (+4.2% yoy in April, +7.1% YTD).

Pirelli shares closed the week at 11.47€ (-3.8%) with an average volume of 2.4 million shares traded per day (-32% vs three-month average), contracting in line with European tyre peers. Consensus target price stood at 12.68€ with 84% of analysts recommending to buy or hold the shares.


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PEERS & MARKETS

The main European stock markets were up in the week from the 21st to the 25th of April 2014 (Stoxx 600 index +0.3%, London +0.9%, Frankfurt -0.1%, Paris +0.3%, Milan -0.8%), on the back of positive German business confidence data (IFO index) and supporting commentary by ECB governor (euro exchange rate becoming more important in setting monetary policy). Friday trading was highly volatile owing to rising military tension between Ukraine and Russia. Healthcare stocks were the best performing in the week (+2.5%) due to significant M&A announcements.

Auto & Parts stocks underperformed and closed down by approximately 2 percentage points (-2.1%). Mass auto makers led the losses, following Q1 2014 sales data weighted down by the devaluation of the main currencies versus the euro.

Pirelli shares closed the week at 11.97€, down 2.1% in line with sector. Daily average volume traded was approximately 3.3 million shares. March tyre market data was published during the week, with car replacement sales growing in all key markets; according to broker CITI, noteworthy is the ongoing positive performance of the replacement market in Brazil, less influenced by high interest rates in the area as compared with the auto market; the continuous growth in Brazilian car parc, moreover, supports the positive outlook for the tyre market in the region. Pirelli consensus target price stood at 12.67€ with over 80% of analysts recommending to Buy or Hold the shares.


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PEERS & MARKETS

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.


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