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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European stock markets were down in the week from 19th to 23d March 2012 (-3.5% Milan, London -1.9%, -2.3% Frankfurt, Paris -3.3%). Market sentiment was affected by the renewed fears of a weakening Chinese economy.

An increase in fuel prices operated by the government in Beijing (the second in the last 6 weeks) plus a warning on estimates of the auto market by Chinese producers’ association (probably less than 5% growth), weighted on the Auto&Parts sector, which was down by 4.7% in Europe.

Pirelli closed the week at € 8.83 (-1.8%) with an average daily traded volumes of approximately 5 million. Goldman Sachs (Buy, € 14.3) and Citi (Buy, TP € 10.5 from € 8.5) renewed the positive view on the stock indicating Pirelli as one of the few companies in the sector with room for upside in spite of the recent rally. The consensus target price now stands at € 9.85 with 91% of coverage with positive recommendations.

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A week that saw sharp rises in the international financial markets (Milan +7.1%, London +5.1%, Frankfurt +4.2%, Paris+5.9%). Investors welcomed the go-ahead from eurozone Finance Ministers for the fifth tranche of aid to Greece, worth 12 billion euros, after the Greek parliament’s approval of the austerity plan.
At sector level, the banking industry benefited the most, with a rise of almost 8 percentage points in the sector index, following the weak performance of the previous week.
Pirelli closed at a year high of €7.52 (+8.1% weekly performance; +24.4% since the start of the year) returning to the levels of July 2007. The share’s performance was also boosted by the start of Citi’s coverage of Pirelli,, with a TP of 9€ and a BUY recommendation. According to the broker, its strong recommendation to buy Pirelli is based on its positioning, unique in the sector, on the premium segment, its focus on Emerging Markets, the higher profitability of its Truck business, compared to its competitors, and its prospects for recovering competitiveness on mature markets.
The current consensus target price for Pirelli was €8.25, with a Buy recommendation from 91% of brokers that cover the share.

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Categories: Peers & Markets

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