PEERS & MARKETS

Pirelli ended the week of November 23-27, among top securities of the Auto & Parts sector. Not only did the stock outperformed the European reference index (+3.4 percentage points), but it also outperformed the Italian blue ships index (+3.6 percentage points) ending the week at € 0.417, a 2.2% increase in a broad market sell-off in all sectors. Several brokers raised their views on the stock, based on the operating performance of Pirelli Tyre in the third quarter 2009, cutting back the holding discount on P&C in view of a greater focus of Pirelli in the core business. Recent upgrades include Morgan Stanley (Buy rating, TP €0.52), Equita (Buy rating, TP €0.51), Cheuvreux  (Outperform rating, TP €0.49), UBS (buy rating, TP € 0.48) and Goldman Sachs (Neutral rating at €0.50). The average target price on Pirelli settles at €0.46; a buy recommendation prevails on the coverage made by 18 business banks.
Pirelli RE ends the week with a negative 2.7% in the Italian real estate sector, clearly in decline (Aedes -6.6%, Bastogi -8.4%, Risanamento -2.6%); Beni Stabili and IGD were the only stocks that closed the week against the market trend.

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PEERS & MARKETS

The auto sector showed a positive trend for the week of October 12 – 16 with Pirelli among the best performers (with a 5.5% increase at 0.42 per share compared to the 2.6% increase of the DJ Stoxx Auto index).  Morgan Stanley initiated coverage on Pirelli (“Maestro of Tyres from Italy to Brazil“) with an “Overweight” recommendation and target price of €0.45. There are several factors that make the stock attractive: guidance on the sustainability of the industrial plan does not completely reflect consensus forecasts, the presence in high-growth markets like in Brazil and reduced risks linked with Pirelli Real Estate after its increase in share capital.
Banca Aletti also gave a positive recommendation on the stock, publishing the first report on Pirelli this week with an Outperform recommendation and target price of €0.48.
Average ratings of stock analysts on Pirelli settle at €0.39; a “BUY” rating prevailing on coverage made by 18 business banks. 
The week also ended in positive territory for the European tyre sector with a 4.5% increase for Michelin and 3.9% for Continental.
Pirelli RE ends the week at € 0.665, a 1.7% decline, however outperforming companies from the Italian real estate sector (Gabetti -7.1%, Aedes -6.4%, IGD +9.3%, Risanamento +2.9%).

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PEERS & MARKETS

Positive week for the European Auto and Parts sector thanks to quarterly results beating market expectations of Pirelli, Michelin and Continental.

Pirelli, one of the best performer, at Piazza Affari makes +6% at €0.293, overperforming the Auto&Parts index by 3.5 pecentage points and the Italian blue chips index (FTMIB) by 4 percentage point.
Many upgrades on Pirelli stock: 10 brokers (63% of total coverage)  reviewed upward either the target price or the recommendation. “Buy” is the prevailing Recommendation on Pirelli (51% of total coverage) and the average target price is around €0.31.
Profit taking on Pirelli Re that closed the week down by 2.3%.

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