Why are the stock market and analysts deflating Pirelli a little?
Pirelli: accounts, forecasts, industrial plan, stock market trend and analysts' opinions
Pirelli deflates on the stock market. The stock of the tire company is down in Piazza Affari, after the presentation of the new business plan for 2023, with analysts stressing that, albeit based on reasonable targets, the targets for 2022 are below the 2019 level.
All the details.
THE INDUSTRIAL PLAN
Pirelli puts on the plate, for the two-year period 2021-2022, investments between 710 and 730 million euros in the first two years. The company promises technology upgrades, mix improvements and increased productivity "to respond to the growing demand in specialties and optimize industrial efficiencies."
For 2023-2025, the planned investments are 1.2-1.3 billion euros, to pursue the same (or almost) same objectives.
TARTGET AND FORECASTS
In 2021, the company confirmed revenues of between 4.7 and 4.8 billion, with an adjusted EBIT margin of between over 14% and 15%. The pre-dividend cash flow, according to forecasts, is between 300 and 340 million and a pfn of approximately 3 billion.
EXPECTATIONS TO 2022
Pirelli, for 2022, expects revenues between 5.1 1 5.3 billion euros with an adjusted EBIT margin of over 16 to 17%. The pre-dividend net cash flow should be between 420 and 460 million euros and the negative net financial position between 2.75 and 2.65 billion euros.
THE NUMBERS TO 2025
By 2025, however, revenues should rise between 5.7-6.2 billion, and the adjuest ebit margin between 19-20%, cash flows before dividends of 1.7-19 billion. Pfn, on the other hand, of 1.6-1.4 billion euros.
THE DROP IN THE STOCK MARKET
Numbers, those of the forecasts, that make Pirelli slow down in Piazza Affari. The stock, at 13.00, loses 0.93% to 4.97 euros. Yesterday, Bicocca shares lost 3.55% (updated at 1 pm).
MEDIOBANCA: TARGET BELOW EXPECTATIONS
Shareholders are also influencing red on the market, who point out that "the objectives to 2022 point to an ebit between 816 and 884 million", writes Mediobanca, adding that the numbers are "below the 2019 level of 917 million despite net cost efficiencies for a total of 170 million between 2021 and 2022 ".
"Although Pirelli has a good track record in terms of restructuring, reaching this level of efficiencies is quite challenging and the growth of competition in some markets could result in execution risks", adds Mediobanca, who confirmed the "underperform" recommendation given that 'the margin growth seems already incorporated by stock market prices and the plan targets should not lead to consensus revisions ”. The same analysts of the Milanese investment bank, reports Il Sole 24 Ore Radiocor Plus , highlight how "Pirelli deals with a multiple of 9.3 times in terms of enterprise value / EBITDA from 2021 and of 16.1 times as price / earnings, above the Michelin and Continental averages (6.3 and 14.7 respectively) but below the Nokian levels (11.7 and 24). Since the beginning of the year the stock has risen by 17% against the + 24% achieved by the auto sector ”.
EQUITA RECOMMENDS SHARE PURCHASE
Equita analysts are more confident, according to which the objectives reflect “reasonable assumptions”. The sim advises to buy the shares and has raised the 2022 estimates to the minimum of the adjusted ebit target (an increase of 9%) and improved the target price by 7% to 5.9 euros per share.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/perche-borsa-e-analisti-sgonfiano-un-po-pirelli/ on Thu, 01 Apr 2021 12:13:44 +0000.