Major European stock markets recovered strongly at the end of the week from the 23rd to the 27th of July 2012 (Milan +4.1%, +0.9% Frankfurt, Paris +2.7%, -0.4% London, Madrid +5.9%). Markets reacted positively after European Prime Ministers reached an agreement on the protection of the Euro currency.
The Auto&Parts sector was up by 2.0% (Stoxx Auto) benefiting from the positive industry newsflow.
Pirelli, the first to publish half-yearly results in tire sector, ended the week at 8.1 € after a rise of 9.4%, in strong outperformance compared to peers. The activity on the stock was high, with over 6.2 million units traded in average per day, 70% more than last month’s average.
Positive comments from analysts on the results with a higher than expected operating performance (+5% vs. Consensus estimates on the ebit.) which confirms the strong position in the premium segment. According to HSBC (Buy and TP at 15 €), Pirelli is confirmed as a ” strong premium story” and the stock with the best earnings growth profile in the tire sector.