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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

European stock markets were again positive in the week from 10 to 14 September 2012 (Milan +3.2%, London +2.1%, Frankfurt +2.7%, Paris +1.8%, Madrid +3.4%) supported by the positive macroeconomic newsflow.

The German Constitutional Court ratified the ESM (with a financial commitment of up to 190 €bln) and the Federal Reserve Governor, mr Bernanke, launched a third round of Quantitative Easing in order to improve employment in the United States (Mortgage Back Securities purchase without preset limits – first tranche of up to 40$bln). The Fed also reiterated its commitment to keep official interest rates near zero until mid 2015 (0.25% the current level).

Auto&Parts sector marked the best performance in Europe (+5.6% Stoxx Auto) driven by Audi and Volkswagen good car sales in August and positive newsflow on Chinese market.

Pirelli ended the week at € 9.37 with an increase of 4.6% and an average daily trading volume of about 3 million pieces. The stock has benefited from the upgrade of Societe Generale who brought the target price to 10.4 € (from 8.7€, Buy confirmed): following the broker, Pirelli fundamentals remain solid and 2012 objectives can be reached despite the difficult market environment. The consensus price target stands at 10.5 € with 75% of the coverage with Buy recommendation.

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PEERS & MARKETS

The week definitely started with a downturn in the major European market (Milan -4.1%, London -2.1%, Frankfurt -2.6%, Paris -2.1%, Madrid -2.2%). Tensions over Spain’s debt (spread Bonos-Bund at 415 points) and the uncertain outcome of elections in Greece and France are making markets very volatile and encourage selling. The negative sentiment is also fuelled by U.S. macroeconomic data on new jobs and unemployment, which proved to be worse than expected.

Bearish attitude also in the Auto&Parts Industry (-4.7%), after the strong rebound earlier in the year (up +20.5% since January 1, 2012).

Pirelli closes the week at 9.355€ (+0.6%) against the trend of the sector and of the reference market. Over 5 million shares, the daily average of dealings. HSBC upgraded Pirelli stock to 15€ (from 12€), confirming its “Overweight” recommendation. The average Consensus Target Price, therefore, goes up to 10.3€ with 96% of analysts covering the stock giving positive recommendations.


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PEERS & MARKETS

Fears about the stability of the euro continue to affect the trend in financial markets in the week 11-15 July (Milan -3.1%. London –2.5%, Paris -4.8%, Frankfurt -2.5%).

Pirelli bucked the trend of the Milan stock exchange and the Stoxx Auto (+6.6pp; +2.6pp) ending the week at €7.66, a rise of 3.7%. The shares, which have recorded growth of 26.5% since the start of the year, were also sustained by the Goldman Sachs upgrade of its TP to €11.0.  High pricing power and continuous improvement of its mix characterise the Pirelli equity story, according to the broker. The market is not ignoring potential growth in Pirelli’s profitability, predicting a group ebit margin of 9.9% in 2011 and 12.7% in 2013.



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