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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

Different trends in European stockmarkets (Milan +3%, Paris +0.9%, Frankfurt -0.2%, London -1.8%). The industrial sector rotation favouring bank stock continued (DJ Stoxx Banks 1.5%) while the sectors and stock that outperformed in 2010 saw the highest sales: this was the case in the Auto & Parts segment, for which the sector index fell –4.2% over the week (+44.5% in the 2010 FY)
Pirelli fell 1.6% to close the week at €5.8, outperforming the European Auto&Parts index by 2.6pp.
The market reacted positively to the announcement of price increases (+3% on Passenger, +7% on Industrial in EMEA and Asia from the beginning of March). For analysts (Unicredit, Chevreux, Banca IMI, etc.) this increase is likely to success, given the strong demand; moreover, Pirelli’s solid track record on the price/mix will allow it to minimise/offset the steep increase in the cost of raw materials.
The RBS valuation of Pirelli shares was revised upward, bringing the TP to €8.0 (from €7.0) For the broker, the focus on the premium and emerging markets will be effective growth levers in the coming years.
The BUY view was confirmed by Equita and Interomonte.
The consensus target price was €7.1, and the recommendation is primarily Buy (63% of analysts’ coverage).


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PEERS & MARKETS

Little change on international markets in the week from 13 to 17 September (Milan +0.9%, London +1.4%, Paris +1.5%, Frankfurt +1.3%) after the positive performance of recent weeks. The sectors that saw the strongest rises were Retail (European reference index +2.7%) and Auto (+2%).
Pirelli closed the week at €5.82, a rise of 3.1%. The share price was buoyed by the announcement of the latest price increase in Europe for the entire product range, reflecting solid price discipline in the industry.  Of note was Intermonte’s upgrading of Pirelli, increasing the TP to €7 (from €6.1) with an Outperform recommendation. Upside drivers included the improved visibility of the company on the tyre market thanks to the recovery in demand, particularly in emerging markets, and the announced increase in production capacity (+20% over the next 3 years). The Consensus TP is now  €6.24 (with Buy recommendations from 83% of the coverage). Pirelli again confirmed its status as the best share in the FTSE Mib basket, with a relative performance 37 percentage points higher than the Milan blue chip list.
Pirelli RE shares continued to rise, outperforming (+11%) both the European Real Estate index (+10pp) and its Italian peers.


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PEERS & MARKETS

The upward trend of international markets continued in the week from 6 to 10 September (Milan +0.9%, London +1.4%, Paris +1.5%, Frankfurt +1.3%).
The auto sector rose too (+4.2%) benefitting from the positive sales results released by Volkswagen for the first eight months of the year (+13.4% YTD; +11.2% YoY up to August) especially in the Chinese, Indian and US markets.
Pirelli reflected the positive trend of the sector closing up by 3.1% at 5.64€ and confirming its position as best share from the start of the year within the FTSE Mib basket. Sustaining it were prospects of improvement in guidance for the FY 2010 and expectations for the 2011-2015 plan. The Group also announced an increase in its European prices: +4% on CAR & Light Truck from 1 October and up to 6% on Truck from September.
For the fourth year running Dow Jones confirmed Pirelli as leader for sustainability in the “Autoparts and Tyres” sector; Pirelli was also the only Italian company to be the world leader in its sector.
A significant rise for Pirelli RE: +7.2%, performing markedly higher than the European Real Estate Index (+5.2 percentage points).


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