Financial analysts describe Pirelli results as ‘a big beat’

While financial analysts described the results as “a big beat”, on the day the news was announced Pirelli’s share price fell 10 per cent. Pirelli pre-tax profitability was said to have been better than consensus of analysts’ estimates, mostly due to better price/mix and cost control. Market watchers also welcomed the fact that margins are at record levels.

So with this in mind, Morgan Stanley asked why did share prices closed down. Their view is that this was due to “profit taking after a +26 per cent run in two months”, reduction of the company’s 2012 Russian market targets” as well as the “sudden departure of COO Mr Gori”. Nevertheless writing in an investor’s note dated 11 May 2012, they were “convinced the market will change its mind.” Apparently the explanation that the positions of Chief Technology Officer and Chief Commercial Officer will be able to execute existing plans “along with increased visibility for the CEO and the CFO of Pirelli” was sufficiently comforting. 

Related news: