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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 up from the 2nd to the 6th of June, 2014, marking the 8th consecutive weekly gain (Stoxx 600 +0.9%, Milan +3.1%, London +0.2%, Frankfurt +0.4%, Paris +1.4%, Madrid +2.5%). Investors reacted positively to decision by European Central Bank to lower interest rates (benchmark rate -10bps at 0.15%, negative deposit rate at -0.1%) and support lending to companies through TLTRO (targeted longer-term refinancing operations, worth 400€/mld). US labor market data provided further support: 217,000 new jobs were added in May (net figure), and unemployment rate was 6.3%.

Auto & Parts stocks performed in line with market (sector index +1.4%). According to LMC, May auto sales in Western Europe were up by 4.5% yoy, with an annual rate (SAAR) of 11.8 mln pcs, slowing down from April’s 12.1 mln pcs.

Pirelli shares closed the week at 12.54€, up 1.4 percentage points with an average volume of 2.5 million shares traded per day, in line with the previous four weeks. In an update report, brokers Goldman Sachs upped recommendation (from Sell to Neutral) and Target Price on the shares (+3€ at 13.6€); the analyst confirms the positive view on the business – exposed to Premium segment and structural growth in South America – and updates the estimates based on new FX scenario, natural rubber pricing trends and the deconsolidation of the Steelcord business. Consensus target price stood at 12.77€ with 85% of analysts advising to Buy or Hold the shares.


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PEERS & MARKETS

European stock markets were mixed in the week from the 12th to the 16th of May 2014 (London +0.6%, Frankfurt +0.5%, Paris -0.5%, Madrid -0.1%), as Eurozone GDP growth fell short of expectations: +0.2% as compared with Q4 2013, estimates of +0.4% growth. The Milan stock exchange underperformed (-3.5% in the week), after Italy’s GDP unexpectedly contracted (-0.1% vs expectations of +0.2%). Concerns over the pace of recovery of the European economy led investors to reduce exposure to the most cyclical sectors: media -2.2%, travel and leisure -3.3%, construction -1.9%.

Auto & parts stocks were down approximately 1.5 percentage points, mass OEMs in particular. According to data published by ACEA, car sales growth in Europe is slowing down (+4.2% yoy in April, +7.1% YTD).

Pirelli shares closed the week at 11.47€ (-3.8%) with an average volume of 2.4 million shares traded per day (-32% vs three-month average), contracting in line with European tyre peers. Consensus target price stood at 12.68€ with 84% 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 21st to the 25th of April 2014 (Stoxx 600 index +0.3%, London +0.9%, Frankfurt -0.1%, Paris +0.3%, Milan -0.8%), on the back of positive German business confidence data (IFO index) and supporting commentary by ECB governor (euro exchange rate becoming more important in setting monetary policy). Friday trading was highly volatile owing to rising military tension between Ukraine and Russia. Healthcare stocks were the best performing in the week (+2.5%) due to significant M&A announcements.

Auto & Parts stocks underperformed and closed down by approximately 2 percentage points (-2.1%). Mass auto makers led the losses, following Q1 2014 sales data weighted down by the devaluation of the main currencies versus the euro.

Pirelli shares closed the week at 11.97€, down 2.1% in line with sector. Daily average volume traded was approximately 3.3 million shares. March tyre market data was published during the week, with car replacement sales growing in all key markets; according to broker CITI, noteworthy is the ongoing positive performance of the replacement market in Brazil, less influenced by high interest rates in the area as compared with the auto market; the continuous growth in Brazilian car parc, moreover, supports the positive outlook for the tyre market in the region. Pirelli consensus target price stood at 12.67€ with over 80% of analysts recommending to Buy or Hold the shares.


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