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.
The main European stock markets were down in the week from the 20th to the 24th of January 2014 (Milan -3.1%, London -2.4%, Frankfurt -3.6%, Paris -3.8%). Investors’ negative sentiment was prompted by the increasingly uncertain outlook of emerging markets. A ~500 million dollar financial instrument linked to the default of a mining company in China will leave investors with no compensation, whereas manufacturing activity in the Asian country is expected to contract in January for the first time in 6 months. In addition, emerging markets currencies are increasing volatile following the reduction in monetary stimulus by the Federal Reserve: the Turkish Lira devaluated by more than 5% over the course of the week (vs the US Dollar, more than 10% devaluation in the last month), the Russian Ruble continues to fall (-5% since the beginning of 2014), and the Argentine Peso dropped by more than 18% over the last 5 days. Within Europe, the Madrid stock exchange (-5.7%) was the most affected due to its exposure to South American economies.
Higher risk aversion in equity markets did not leave the Auto & Parts sector untouched (sector index -4.7% vs benchmark Stoxx 600 -3.3%). Fiat (-1.1% following the finalization of the buyout of 41.46% of Chrysler) and Peugeot (-2.1% thanks to Moody’s positive reaction to the 3 billion euro capital increase) were relative best performers.
Pirelli shares ended the week at 12.24€ (-3.1%) with an average trading volume of 2.1 million shares per day (-17% vs last month average). Tyre markets developed positively in December: sales of car tyres in the replacement channel grew in all main markets globally.
Consensus target price stood at 12.2€ with 83% of analysts advising to Buy or Hold the shares.
The main European stock markets were up in the week from the 13th to the 17th of January, 2014 (Milan +2%, London +1.3%, Frankfurt +2.8%, Paris +1.8%, Madrid +1.7%), on the back of supportive macro data: the World Bank upgraded its global GDP growth expectations for 2014 (+3.2%, previous estimate 3%), and positive news came out of US retail sales (+0.4% in December) as well as industrial production in Europe (+1.8% in November).
Auto & Parts stocks were up strongly (+5% vs Stoxx 600 +1.8%); mass-market OEMs led the gains, as the European car market showed its strongest monthly gain since December 2009 (+13.3% yoy in December, UK +23.4%, Germany +5.4%, Italy +1.4%). Moreover, investor sentiment was supported by positive commentary coming from the Detroit motor show: the European car market should return to moderate growth in 2014 (+3% according to Goldman Sachs).
Pirelli shares closed the week up 7.1% at 12.63€ with an average daily trading volume of 3.6 million shares.
J.P. Morgan confirmed its positive view on the stock (Overweight rating, 13.5€ Target Price): according to the analyst, Pirelli’s operations in Russia will break even in 2014 and the company will increase its retail penetration both in Europe and South America, maintaining a strong pricing power and reaching an Ebit margin of 14.5% in 2015.
Consensus target price stood at 12.2€ with 83% of analysts recommending to Buy or Hold the shares.
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