Fears that economic growth would be slowed by repeated anti-inflation measures taken by China and India caused a downturn in the international stock markets in the week 2 to 6 May (Milan –2.1%, London –1.5%), Paris +1.2%, Frankfurt –0.3%).
Sales in the Auto&Parts sector (Stoxx index -1.3%) were affected by the profit-taking that followed an excellent reporting season, and widespread uncertainty about the impact of the disaster in Japan and the pressure raw material market prices might exert on second quarter results.
Pirelli closed at €6.96 (-0.9%) outperforming both the sector index (+0.4pp v Stoxx Auto) and Piazza Affari (+1.2pp) with an average of over 5 million trades. After the publication of the Q1 2011 results, which were better than expected, analysts were positive, with revised guidance for 2011. There were many increased valuations, by 60 eurocents on average, with a TP of €8.2 (with an average TP of 7.9 for the whole coverage). The most prevalent recommendation was Buy ((82% of total coverage).