PEERS & MARKETS

A sharp rise for Pirelli in the week 4 to 8 April 2011, returning to a three-year high of €6.5 (+3.8%, about 2pp higher than the Milan blue chip index). This price trend was supported by upgrades by Mediobanca (Overweight and TP at €7.2 from €6.9), Societe Generale (Neutral at €6.9 from €6.25) and Morgan Stanley (Overweight at €9 from Underweight at €6.6).
For Morgan Stanley in particular, Pirelli is the only share in the Auto & Parts sector to offer a high upside on its results: growth of 20% in EPS is forecast in 2011, and 21% in 2012.
The trend on the major international markets was also broadly positive (Milan +1.9%, London +0.8%, Paris +0.2%, Frankfurt +0.5%).
The BCE decision to raise the official interest rate by 25 points (to 1.25%) had a particularly positive effect on bank shares, which recorded growth of 2.2% over the week, and on the Euro, which reached a 15-month high of 1.4426 against the dollar. Industrial (Stoxx –1.4%) and Auto (-0.7%) shares, in contrast, were weak. 
It should be noted that the continuing geopolitical tensions in the Middle East and Africa meant that oil reached a 32-month high during the week (with Brent at 124 dollars a barrel).

PEERS & MARKETS

Severe drawback on major international stock markets on the week of March 14-18 (Milan -3%, London -1.9%, Frankfurt -4.5%, Paris -3%, Tokyo -10.2%) primarily reflecting the nuclear threat in Japan after the strong earthquake and the potential impact on the global economic system.
Fear on the situation in Libya that continues to unravel also reflected negatively on the market and oil prices hit new highs (prices on March 18: Brent around $114, WTI at $101).
Pirelli ends the week at € 5.93, a drop of 1.9%, but contained losses compared to the European index (-3.4% Stoxx Auto&Parts) and the sector. A daily average of 5 mln shares were exchanged.
Moreover, RBS confirms  the BUY rating on the stock with a TP of €8.

PEERS & MARKETS

Negative week for major stock markets: from 17 to 21 May,  London  marks a -3.8%, Milan -1.2%, Paris -3.6% and Frankfurt -3.8%. The main drivers behind performance on the stock exchanges being the fears that consolidation plans under study by European Countries might delay economic recovery.
Sales were mainly focused on shares related to basic resources (-7%) and energy (-5%) with oil falling to $ 70 a barrel.
Pirelli closed the week down by 4.5%, in line with Michelin (-5.5% the DJ Stoxx Auto).
Poor performance for the stocks of the Italian Real Estate sector with Pirelli RE down by 8.9%, Risanamento -11.4% and Aedes -9.0%.

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