Pirelli up, market rewards accounts and guidance confirmation

(Il Sole 24 Ore Radiocor) - The market rewards the quarterly results of Pirelli and the stock is one of the few to rise at Piazza Affari, gaining more than a point, bucking the trend of the FTSE MIB. The tyre group slightly exceeded expectations in the second quarter and confirmed guidance for 2024 at the top end. In detail, Pirelli closed the half year with a profit down to 231 million, but better than expected, discounting the impact of hyperinflation. Revenues remained stable at €3.45 billion. In the March-June period, net profit rose 2.6% to €130.9 million and revenues increased 0.8% to €1.75 billion, beating consensus expectations of €1.73 billion. The year-earlier period saw a 2.6% increase in net profit to €130.9 million.

 The result is supported by the price mix at +3.3%. This is the "best figure in the sector" observed Equita analysts, comparing it with Michelin's +1.1% and Nokian's +1.4%. Adjusted EBIT also improved, rising 3% to 277 million for the quarter, with the margin increasing to 15.8%. In light of these results, the Bicocca-based group confirmed its guidance for the full year 2024, which envisages revenues of between EUR 6.6 billion and EUR 6.8 billion with volumes at around +1.5%/+2.5% and an improvement in the price mix (+2%/+2.5%) compared to +2% in the previous estimate. Management also aims to achieve the upper end of the margin (adjusted Ebitda margin at 15.5%).

Analysts confirm their estimates for the year, indicating that they 'are already aligned' with the top end of guidance. "While we appreciate the company's strategy and recent execution, especially in terms of cash generation," the borker adds, "we confirm our Neutral rating due to the lack of upside to the target price (confirmed at EUR 6). Equita also confirms its buy recommendation with a price target at EUR 6.50.