Pirelli: Morgan Stanley maintains 'overweight' rating
(CercleFinance.com) - Morgan Stanley maintains its "overweight" rating on the Pirelli share, along with its target price of 5.
75 euros, saying that cost savings and capital expenditure have become "key" for the Italian tyremaker.
In a note to clients, the broker pointed out that Pirelli has disappointed on mix/margins and deleveraging, due to the weak market and volatile working capital in 2019.
"To expand margins, we think incremental cost actions are needed," MS noted, adding that further capex reductions could improve free cash flow.
Indeed, the current free cash-flow yield could prove attractive with better visibility, it said.
The shares are up over 3% at 4.6 euros on the Milan Stock Exchange today.
Copyright (c) 2020 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
75 euros, saying that cost savings and capital expenditure have become "key" for the Italian tyremaker.
In a note to clients, the broker pointed out that Pirelli has disappointed on mix/margins and deleveraging, due to the weak market and volatile working capital in 2019.
"To expand margins, we think incremental cost actions are needed," MS noted, adding that further capex reductions could improve free cash flow.
Indeed, the current free cash-flow yield could prove attractive with better visibility, it said.
The shares are up over 3% at 4.6 euros on the Milan Stock Exchange today.
Copyright (c) 2020 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.