Pirelli (PIRC.MI): Downgrade to Neutral after a strong run. High quality and defensive but risk-reward more balanced now

研报英文原文证据摘录

Pirelli (PIRC.MI): Downgrade to Neutral after a strong run. High quality and defensive but risk-reward more balanced now

Action |

08 Jul 2026 00:00:00 ET │ 19 pages

Pirelli (PIRC.MI)

Downgrade to Neutral after a strong run. High quality and defensive but

risk-reward more balanced now

CITI'S TAKE Neutral ↓ from Buy

Price (07 Jul 26 13:58) €6.98 We downgrade to Neutral but lift our TP to €7.50 following a strong YTD

Target price €7.50↑ run, seeing risk-reward as more balanced now. Pirelli continues to offer

best-in-class exposure and execution to the HV 18"+ tyre enrichment from €7.40

story, and we continue to see FY26 guidance as achievable. However, Expected share price return 7.4%

noting that we are in-line with VA consensus on both 2Q26 and FY26 Expected dividend yield 3.6%

estimates, and given the strong run YTD, we downgrade to Neutral. Pirelli Expected total return 11.0%

continues to offer strong defensive characteristics and a dependable Market Cap €7,572M

margin/FCF story that is clearly rare in the EU auto space. To the degree

US$8,660M that the broader EU supplier/OEM outlook weakens further from here,

these traits may allow for a further re-rating at Pirelli. However, with

shares 2SD overbought, valuations now more balanced and our in-line

estimates, we move to Neutral. Next catalyst is 2Q26 results where a solid Ross MacDonaldAC

outcome feels priced-in following a 17% rally in the last 6m. +44-20-7986-7547

ross.macdonald@citi.com

Taking profits after a strong run; still lots to like fundamentally but overdue a Harald C Hendrikse

pause for breath — With 80%+ HV sales mix into a rock solid UHP market in 2026, +44-2075-0858-10

with best-in-class margins and consistent execution of organic growth (2%+ for >4 harald.hendrikse@citi.com