PEERS & MARKETS

The main European stock markets were down in the week from the 26th to the 30th of March, 2012 (Milan -3.1%, London -1.5%, Frankfurt -0.7%, Paris -1.5%, Madrid -3.3%). The decision to increase the European rescue fund to € 800 bln (partially expected) was not enough to balance the renewed worries surrounding the Eurozone sovereign debt.

Pirelli closes the week at €8.92 (+1.1%, with daily average volumes of 4.4 mln), outperforming the Auto & Parts index (-0.8%). In the week, broker Société Générale upped the valuation of the stock, setting the Price Target at €10.2 (from €8.20), while confirming the “Buy” rating. According to the analyst, FY 2011 results provided support to the positioning of Pirelli in the Premium segment and in Latin America.

The first quarter of 2012 marks a positive performance for Pirelli, with the stock up 37.1%, better than the European Auto & Parts index (27.8%) and Milan (+5.9%).

PEERS & MARKETS

The main European stock markets were up in the week from the 27th to the 2nd of March, 2012 (Milan +2.5%, London -0.5%, Frankfurt +0.8%, Paris +1%). Investors reacted positively to the liquidity injection by the ECB into the banking sector (three years, 1% interest rate), which benefited the bond market (EU government bond yields generally retreated in the week).

Auto & Parts stocks were slightly down (Stoxx index -0.6%), due to uncertainties related to rising oil prices (Brent futures $123/barrel).

Pirelli closed at €7.895 (-0.4%, in line with the sector). Broker Mediobanca upgraded the stock’s Target Price from €8 to €10, confirming the Outperform rating. According to the analyst, Q4 2011 results should confirm the good profitability trend, thanks to price/mix growth which should compensate weak volumes.

Tyre peers’ stocks performance was subdued: Michelin (-2%), Nokian (-0.4%). Continental outperformed (+2.6%) after presenting FY11 results and an optimistic market outlook for FY12.

PEERS & MARKETS

European stock markets were mixed in the week from the 20th to the 24th of February (Milan -0.4%, London +0.5%, Frankfurt +0.2%, Paris +0.8%), on lower European GDP growth forecasts (GDP -0.3%, inflation 2.1%) and another Greece sovereign debt rating downgrade by Fitch (to C from CCC). Equities trading was also negatively affected by disappointing European PMI data, down to 49.7, signaling a contraction in economic activity (expectations of 50.8).

Auto & Parts stocks performed in line with the overall market (European sector index down 0.4%).

Tyre stocks recorded losses in the week: Pirelli was down 2.9% at €7.925, similarly to Michelin (-3%) and Nokian (-1%).