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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 slightly up in the week from the 24th to the 28th of February, 2014 (Milan +0.2%, Frankfurt +0.4%, London -0.4%, Paris +0.6%, Madrid +0.4%). On a positive note, the EU revised its 2014 Eurozone GDP growth estimates: +1.2% yoy vs +1.1% forecasted in November; improved outlook for Germany (+1.8% vs +1.7%), France (+1% vs +0.9%) and Spain (+1% vs +0.5%), whereas Italy’s growth is expected down to +0.6% (+0.7% previously). European unemployment in January was in line with expectations at 12% (stable vs December), and the US purchasing manager confidence surprised on the upside. Volatility was up sharply towards the end of the week, as political tension kept rising in Ukraine causing today’s sell-off in equity markets.

Auto & Parts stocks were down in the week (-1% vs Stoxx 600 +0.6%), weighted down by large-cap VW (-6%): the shares factor in the dilutive impact of the preference shares issued to finance the acquisition of Scania (6%/7% dilution according to broker Cheuvreux). Moreover, investors reduced exposure to those stocks most exposed to the Russian market (Renault -2.5%, Nokian -4.9%).

Pirelli shares were up 0.6% in the week, closing at 12.6€ with an average daily trading volume of 2 million shares (-20% vs 4-week average). The deal reached with Bekaert (disposal of steel cord business and long term supply agreement) was already discounted by the market; sector analysts viewed the deal positively, as it increases Pirelli’s focus on Premium tyres, with higher profitability, it reduces exposure to a volatile business (steelcord is mainly a truck tyre component), and it has a positive impact on net debt. Consensus target price stood at 12.04€ with 74% of analysts advising to buy or hold the shares.


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PEERS & MARKETS

The main European stock markets were mixed in the week from the 17th to the 21st of February, 2014 (Milan -0.2%, London +2.6%, Frankfurt -0.1%, Paris +0.9%, Madrid -0.6%). On the macro data front, negative surprises came from the drop in German consumer confidence (February Zew index down for the second consecutive month) and from the contraction in Chinese manufacturing (February flash PMI). Good news were the US employment, with a drop in jobless claims, whereas the Fed minutes hinted at the possibility that interest rates might be hiked sooner than expected.

Auto & Parts stocks were up in the week (sector index +0.7%), now the best performing sector in 2014ytd with a return 3 times higher than the Stoxx 600 index (+7.6% vs +2.4%). Peugeot led gains following FY13 results and the capital increase agreement with the French State and Chinese partner Dongfeng Motors.

Pirelli shares closed the week stable at 12.53€ (-0.6%) with limited volumes: daily average shares traded at 1.7 million are 43% below the average for the last month. According to data published by Michelin, tyre market trends in January confirmed the rebound in the European Car replacement channel and the weakness in Brazilian OE. Consensus Target Price stood at 12.04€ with 74% of analysts recommending to Buy or Hold the shares.


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PEERS & MARKETS

The main European stock markets were up in the week from the 3rd to the 7th of February, 2014 (Milan +1.4%, London +0.9%, Frankfurt +0.0%, Paris +1.5%, Madrid +1.5%), characterized by high volatility and the publication of mixed macro data. US manufacturing activity in January (weighed down by weather conditions) and the Chinese service sector surprised negatively, whereas growth in the US job market sustained a positive mood. In its Thursday meeting, the ECB minimized the risks of deflation in the Euro area, whilst keeping the benchmark interest rate at a low 0.25%.

Auto & Parts stocks advanced in line with the market (sector index +1.1%), led by German Premium OEMs: the local car market grew in January (car registrations +7% yoy, car production +11% yoy) and Daimler provided a confident outlook to 2014 when reporting FY 2013 results.

Pirelli shares ended the week at 11.84€ (-1%) with an average trading volume of 2.8 million shares per day (monthly average at 3.3 million shares). Consensus Target Price is at 12.11€ with approximately 80% of analysts recommending to Buy or Hold the shares.


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