Major European stock exchanges was sharply down in the week from May 14th to 18th 2012 (Milan -7.1%, -5.5% in London, Frankfurt -4.7%, -3.9% Paris, Madrid -6.1%). Markets were affected by the worsening political situation in Greece which will have to resort to new elections, and the ECB statement of no new intervention to stimulate the European economy.

The European Auto&Parts sector was down by 7.7% penalized by macroeconomic concerns and fears of a slowdown in the Chinese market. Pirelli ended the week better than the sector at € 8,305 (-3.6%) with an approximate average of 4.6 million shares traded daily.

Auto&Parts stocks were flat in the week (-0.4%). Pirelli (8.9€, -4.9%) saw some profit taking after the Q1’012 Results. Year-to-date performance is +36.7%. Analysts’ comments on the results were positive; Morgan Stanley, among others, considers the current stock price a very good entry-point for what is considered a top-pick in the sector.

Average consensus target price went up to 10.4€ with 96% of the coverage with a positive recommendation.

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.

The main European stock markets were up in the week from the 23rd to the 27th of March, 2012 (Milan +2.6%, London +0.1%, Frankfurt +0.8%, Paris +2.4%, Madrid +1.5%). Indices started weak, due to the political news flow in The Netherlands and France; trading in the remainder of week was supported by the successful placement of European sovereign bonds (Italy, Spain, The Netherlands), positive leading indicators in the USA (real estate and manufacturing) and better than expected Q1 ’12 results (according to Goldman Sachs, 45% of companies beat consensus by more than 5%).

Auto & Parts stocks (+5%) led gains among European equities (Stoxx 600 +0.5%), followed by Industrals (+2%).

Pirelli shares outperformed the market, advancing +6.8% at €9.3. Daily average trading volume amounted to 3.6 million shares. Italian broker Centrobanca upped the stock’s Target Price (€10 from €9.37), confirming the “Buy” rating. The analyst highlighted the good prospects of the business in the medium term, thanks to the expansion in Russia and the ongoing improvement in production efficiency. Consensus Target price is at €10.06, with 91% positive recommendations.

The main European stock markets were down in the week from the 16th to the 20th of April 2012 (Milano +0.3%, Londra +2.1%, Francoforte +2.5%, Parigi 0.0%, Madrid -2.9%). After a positive start, following the good placement of 12/18 month yield Bonos (2.09 €bln and 1.09 €bln respectively), trading discounted the renewed fears about Spanish debt, supported by non-performing loans data released by Iberian banks.

The European Auto & Parts sector (+0.2%) was flat in the week.

Pirelli stock ended the week at 8.705€ down by 0.7% with an average daily volume of approximately 4 million shares. The year-to-date performance of the stock is still positive: +33.8%, +13.4pp vs Stoxx Auto.

Tyre choices and pit stop strategy set up a duel in the closing stages of the race, as McLaren’s Jenson Button on a fresh set of P Zero White medium tyres attempted to chase down the leader, on an older set of the medium tyres. Although Button – who stopped three times – was delayed by a problem during his final pit stop, he was just one of many drivers to mount a spectacular charge during the final stint in Shanghai. With four laps to go, Button passed Red Bull’s Sebastian Vettel to claim the runner-up spot.

Vettel chose a two-stop strategy, but was forced to defend from the McLaren of Lewis Hamilton, who claimed the final podium place on the penultimate lap, despite making one more pit stop than the reigning world champion. Hamilton now leads the drivers’ championship, with McLaren having adopted a different strategy to most of their rivals. The Englishman was one of the few drivers to stick with the soft tyre during his second stint, while the majority of other drivers went to the harder tyre on their first stops.

Pirelli’s motorsport director Paul Hembery commented: “Many congratulations to Nico and to Mercedes for this thoroughly well-deserved victory, during which they exhibited a perfect understanding of how to get the most out of both compounds in challenging circumstances and keep the tyres within the optimal performance window. As expected, we saw a high degree of tyre degradation in the tough conditions of China, with the front-left tyre in particular coming under particular stress. This gave the opportunity for the teams to try out a wide variety of different strategies, which resulted in spectacular yet clean wheel-to-wheel racing that if anything surpassed even last year’s Chinese Grand Prix. I’d also like to congratulate our former test driver Romain Grosjean, who claimed his best-ever finish with sixth overall for Lotus.”

The main European stock markets were down in the week from the 9th to the 13th of April 2012 (Milan -5.8%, London -0.9%, Frankfurt -3.0%, Paris -3.8%). Trading was affected by the renewed worries around the sovereign debt of Southern European countries and the global economic trend (Chinese GDP in the first quarter of the year and US consumer sentiment data were worse than expected).

Auto & Parts stocks (-3.8% in the week) were affected by weak European car registration data, showing a 9% decline over last year.

Pirelli stock showed a different trend, closing the week flat at 8.77€, with an average daily volume of 4.3 million shares.

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%).

European stock markets were down in the week from 19th to 23d March 2012 (-3.5% Milan, London -1.9%, -2.3% Frankfurt, Paris -3.3%). Market sentiment was affected by the renewed fears of a weakening Chinese economy.

An increase in fuel prices operated by the government in Beijing (the second in the last 6 weeks) plus a warning on estimates of the auto market by Chinese producers’ association (probably less than 5% growth), weighted on the Auto&Parts sector, which was down by 4.7% in Europe.

Pirelli closed the week at € 8.83 (-1.8%) with an average daily traded volumes of approximately 5 million. Goldman Sachs (Buy, € 14.3) and Citi (Buy, TP € 10.5 from € 8.5) renewed the positive view on the stock indicating Pirelli as one of the few companies in the sector with room for upside in spite of the recent rally. The consensus target price now stands at € 9.85 with 91% of coverage with positive recommendations.