Pirelli & C. SpA (PIRC) AI Stock Analysis

• Market Cap: €6.15B
• Dividend Yield: 4.18%
• Average Volume (3M): 2.50M
• Price to Earnings (P/E): 12.3
• Beta (1Y): 0.69
• Revenue Growth: 1.64%
• EPS Growth: 14.73%
• Country: IT
• Employees: 30,641
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Parts
• EPS (TTM): 0.15
• Shares Outstanding: 1,000,000,000
• 10 Day Avg. Volume: 2,143,648
• 30 Day Avg. Volume: 2,498,865
• PEG Ratio: -5.98
• Price to Book (P/B): 1.01
• Price to Sales (P/S): 0.86
• P/FCF Ratio: 6.56
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €6.94
• Price Target Upside: 17.03% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 71 Outperform
• Price Target: €6.50 ▲(9.61% Upside)

Pirelli & C. SpA's overall stock score reflects strong financial performance and attractive valuation, offset by stable but cautious technical indicators. The company's solid profitability and cash flow metrics are significant strengths, while the declining revenue growth rate and moderate leverage present challenges. The stock's valuation suggests potential undervaluation, making it appealing to value investors.

Pirelli & C. SpA Business Overview & Revenue Model

Company Description

Pirelli & C. S.p.A. manufactures and supplies tires for cars, motorcycles, and bicycles worldwide. It offers car tires under the P ZERO, Cinturato, Scorpion, Sottozero, Ice Zero, and Carrier brand names; motorcycle tires under the DIABLO Superbike, DIABLO Supercorsa, DIABLO Rain, DIABLO Wet, SCORPION MX, SCORPION Pro F.I.M., SCORPION XC, DIABLO Supercorsa SP, DIABLO Rosso Corsa, DIABLO Rosso III, ANGEL GT II, NIGHT DRAGON, MT 66 ROUTE, SCORPION Trail II, MT 60 RS, SCORPION Rally STR, DIABLO ROSSO Scooter, and ANGEL Scooter brands; motorsport tires under the P ZERO TROFEO R, SOTTOZERO, P7 Corsa, K, KM, RK, rain, and Slick brands; bike tires under the P Zero, Cinturato, and Scorpion brand names; and truck and bus tires. The company also provides Run Flat and Seal Inside specialties that enable cars to continue driving after a puncture; Pirelli Noise Cancelling System for reducing noise by rolling; and Elect, a line of tires for electric vehicles. It operates approximately 17,000 points of sale. Pirelli & C. S.p.A. was founded in 1872 and is headquartered in Milan, Italy.

How the Company Makes Money

Pirelli generates revenue primarily through the sale of tires, which account for the majority of its income. The company's revenue model is structured around several key segments, including the consumer tire segment (which encompasses passenger car and motorcycle tires) and the industrial tire segment (covering tires for trucks, buses, and specialty vehicles). Additionally, Pirelli benefits from its strong brand positioning in the premium tire market, allowing it to command higher prices. Significant partnerships with automotive manufacturers for original equipment tire supply and ongoing contracts in motorsport further contribute to its revenue streams. The company also invests in research and development to innovate its product offerings, enhancing performance and sustainability, which can lead to increased market share and profitability.

Pirelli & C. SpA Financial Statement Overview

Summary

Pirelli & C. SpA exhibits solid financial health with strong profitability and cash flow metrics. While the balance sheet shows moderate leverage, the declining revenue growth rate is a concern. The company should focus on reversing the revenue decline to maintain its financial stability.

Income Statement

Pirelli & C. SpA shows strong gross profit margins consistently above 60%, indicating efficient cost management. However, the recent TTM revenue growth rate is negative, suggesting potential market challenges. Net profit margins have improved slightly, reflecting better profitability, but the overall revenue decline is a concern.

Balance Sheet

The company maintains a moderate debt-to-equity ratio, indicating a balanced approach to leveraging. Return on equity is stable, reflecting consistent profitability. However, the equity ratio suggests a moderate reliance on debt, which could pose risks if market conditions worsen.

Cash Flow

Pirelli & C. SpA demonstrates strong cash flow management with positive free cash flow growth and a healthy free cash flow to net income ratio. Operating cash flow coverage is improving, indicating efficient cash generation relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	6.82B	6.77B	6.65B	6.62B	5.33B	4.30B
Gross Profit	4.22B	4.22B	4.40B	4.41B	3.67B	2.86B
EBITDA	1.46B	1.41B	1.39B	1.27B	1.07B	714.80M
Net Income	498.88M	467.98M	479.08M	417.76M	302.80M	42.67M
Balance Sheet
Total Assets	12.97B	13.68B	13.53B	13.90B	13.88B	13.76B
Cash, Cash Equivalents and Short-Term Investments	930.50M	1.67B	1.48B	1.54B	2.00B	2.33B
Total Debt	3.81B	3.83B	3.96B	4.49B	5.28B	5.85B
Total Liabilities	7.27B	7.77B	7.91B	8.44B	8.84B	9.21B
Stockholders Equity	5.54B	5.76B	5.49B	5.32B	4.91B	4.45B
Cash Flow
Free Cash Flow	1.02B	888.89M	960.83M	796.24M	632.40M	424.95M
Operating Cash Flow	1.43B	1.29B	1.36B	1.13B	919.07M	618.35M
Investing Cash Flow	-381.82M	-421.26M	-392.86M	-326.62M	-256.39M	-251.68M
Financing Cash Flow	-843.99M	-610.70M	-979.58M	-1.40B	-1.08B	439.40M

Pirelli & C. SpA Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 5.93
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IT:PIRC, the sentiment is Negative. The current price of 5.93 is below the 20-day moving average (MA) of 6.10, below the 50-day MA of 6.03, and above the 200-day MA of 5.73, indicating a neutral trend. The MACD of <0.01 indicates Positive momentum. The RSI at 38.95 is Neutral, neither overbought nor oversold. The STOCH value of 18.02 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IT:PIRC.

Pirelli & C. SpA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BRE	79 Outperform	€4.62B	11.21	―	3.21%	-0.22%	-12.64%
DLG	75 Outperform	€4.63B	14.44	17.64%	2.45%	13.95%	17.07%
MONC	74 Outperform	€15.17B	24.78	18.89%	2.35%	0.87%	-5.61%
RACE	72 Outperform	$83.62B	39.43	43.40%	0.87%	9.53%	12.89%
PIRC	71 Outperform	€6.15B	12.33	8.81%	4.18%	1.64%	14.73%
STLAM	63 Neutral	$33.74B	―	-3.01%	8.10%	-17.07%	-118.99%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%