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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

The main European stock markets were mixed in the week from the 17th to the 21st of February, 2014 (Milan -0.2%, London +2.6%, Frankfurt -0.1%, Paris +0.9%, Madrid -0.6%). On the macro data front, negative surprises came from the drop in German consumer confidence (February Zew index down for the second consecutive month) and from the contraction in Chinese manufacturing (February flash PMI). Good news were the US employment, with a drop in jobless claims, whereas the Fed minutes hinted at the possibility that interest rates might be hiked sooner than expected.

Auto & Parts stocks were up in the week (sector index +0.7%), now the best performing sector in 2014ytd with a return 3 times higher than the Stoxx 600 index (+7.6% vs +2.4%). Peugeot led gains following FY13 results and the capital increase agreement with the French State and Chinese partner Dongfeng Motors.

Pirelli shares closed the week stable at 12.53€ (-0.6%) with limited volumes: daily average shares traded at 1.7 million are 43% below the average for the last month. According to data published by Michelin, tyre market trends in January confirmed the rebound in the European Car replacement channel and the weakness in Brazilian OE. Consensus Target Price stood at 12.04€ with 74% 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 10th to the 14th of February, 2014 (Milan +3.8%, London +1.4%, Frankfurt +3.9%, Paris +2.6%), helped by the statement of recently appointed Fed Governor Janet Yellen: monetary policy will continue with progressive reduction in the bond buying program, should macro indicators progress as forecast. Positive news, moreover, came out of China, with January imports and exports data beating expectations (trade balance at 31.86$/mld vs 25.64$/mld in December), Germany (Q4 ’13 GDP +0.3% vs expectations of +0.1%) and France (GDP +0.3% vs +0.1%).

Auto & Parts stocks led the gains (sector index +6.5% vs Stoxx 600 +2.5%); Goldman Sachs confirmed its positive view on the sector, improving the outlook for new car registrations in Europe, now +6.4%, +5.8% and +3.1% in the three years from 2014 to 2016 (previous estimates were +3.2%, +4.7%, +2.9%); the broker prefers stocks with lower exposure to Emerging Markets volatility. Investors reacted positively, moreover, to better than expected Q4 results for Renault, Faurecia and Michelin.

Pirelli closed the week up 6.5% at 12.61€ with an average trading volume of 3.2 million shares per day; investor sentiment on tyre stocks is improving thanks to commentary provided during the FY13 reporting season: 2014 volumes should show moderate growth and price/mix vs raw materials should develop positively. In its sector update, GS reviewed its valuation on the stock (Sell, TP 10.6€) discounting a more cautious view on foreign exchange and tyre demand in South America. Consesus Target Price stood at 12.04€ with 74% of analysts advising to Buy or Hold the shares.


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PEERS & MARKETS

The main European stock markets were up in the week from the 3rd to the 7th of February, 2014 (Milan +1.4%, London +0.9%, Frankfurt +0.0%, Paris +1.5%, Madrid +1.5%), characterized by high volatility and the publication of mixed macro data. US manufacturing activity in January (weighed down by weather conditions) and the Chinese service sector surprised negatively, whereas growth in the US job market sustained a positive mood. In its Thursday meeting, the ECB minimized the risks of deflation in the Euro area, whilst keeping the benchmark interest rate at a low 0.25%.

Auto & Parts stocks advanced in line with the market (sector index +1.1%), led by German Premium OEMs: the local car market grew in January (car registrations +7% yoy, car production +11% yoy) and Daimler provided a confident outlook to 2014 when reporting FY 2013 results.

Pirelli shares ended the week at 11.84€ (-1%) with an average trading volume of 2.8 million shares per day (monthly average at 3.3 million shares). Consensus Target Price is at 12.11€ with approximately 80% of analysts recommending to Buy or Hold the shares.


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