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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 22nd to the 26th of July, 2013 (Milan +1.8%, London -1.1%, Frankfurt -1.0%, Paris +1.1%). The Chinese Premier reassured investors on 2013 growth in the Asian country (at least 7%), but negative surprises came from manufacturing and real estate sector data in the US as well as from disappointing Q2 earnings of large players in the chemical and industrial sectors.

Auto & Parts stocks were stable in the week (sector index -0.3%). Barclays upgraded the sector view while staying cautions (Hold from Sell), on the back of improving market fundamentals in Europe (volume and pricing) and expectations of an upside from emerging markets growth.

Pirelli shares closed the week at 9.65€, up 1.1 percentage points. Volumes traded were low (approx. 1.7 million shares per day, or 22% lower than last month’s average), and tyre market data for June strengthened analyst’s expectations that the European market might be stabilizing (car tyre replacement market was up +3% yoy in June).

Consensus target price stood at 9.7€, with 45% of analysts in the coverage recommending to “Buy” the stock.


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PEERS & MARKETS

The main European stock markets were down in the week from the 20th to the 24th of May, 2013 (Milan -4%, London -1%, Frankfurt -1.1%, Paris -1.1%, Madrid -3.7%), after more than a month of gains brought indices to their highest levels since June 2008. Concerns mounted that the Federal Reserve may scale back Quantitative Easing in one of its next meetings and preliminary Chinese PMI data disappointed, showing that manufacturing activity contracted during the month of May.

Auto & Parts stocks were in negative territory in line with overall equity markets; sector index posted a -2.4% decline during the week but is still up 9.1% in 2013, mostly thanks to mass OEMs stocks recovering from their 2012 lows.

Pirelli closed the week at 8.53€, down 1.6% before dividend payment, with an average daily volume of 1.7 million shares (monthly average is 2.7 million).
In its London roadshow feedback report, Bank of America – Merril Lynch analyst confirmed Target Price (9.7€) and rating (“Buy”) on the stock. Societe Generale revised down its recommendation to “Neutral”, given Pirelli’s recent stock outperformance (+19% over the last month) which limited upside potential. According to both analysts, improving market volumes and supporting raw material input prices should positively impact 2013 targets achievement.

Target Price is slightly up at 9.18€, with 78% of analysts advising to “Buy” or “Hold” Pirelli shares.


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PEERS & MARKETS

The main European stock markets were mixed in the week from the 7th to the 11th of January 2013 (Milan +3.2%, London +0.5%, Frankfurt -0.8%, Paris -0.6%). In its Thursday meeting the European Central Bank, as expected, left its benchmark rate unchanged at 0.75%, commenting that the economy is still weak and a recovery is expected only in the second half of 2013. Concerns arose, moreover, from the increase in Chinese inflation over the month of December (+2.5%, more than expected) which could limit the scope for monetary easing.

Auto & Parts stocks retreated in the week (Stoxx A&P was down 1%); European car registration data for the month of December showed that the five largest markets (France, Spain, Italy, Germany and UK) contracted 14% on a yearly basis. Valuations near to 10-month lows and upside in case of an improvement in consumer confidence led Goldman Sachs analyst to reiterate its attractive stance on Auto & Parts stocks in 2013. The broker is however more cautious on tyre stocks given their strong performance in 2012 (+44% on average) and possible pricing pressure ahead; accordingly, all stock recommendations and target prices were revised down.

Pirelli stock was up +1.8% in the week, closing at €9.11 with an average daily traded volume of 3.2 million shares. Bank of America – Merril Lynch initiated the coverage on the stock with a “Buy” recommendation and an €11.5 target price. As a result, Pirelli average target price stood at €9.9 with 79% of analysts recommending to “Buy” or “Hold” the stock.


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