War in Ukraine, crisis alarm goes off: 2022 estimates are down
Pirelli collapses to bag of Milan: the stock, at mid-morning, leaves a minus 7% on the ground at € 5.212, in an almost completely red list. The reason? The beginning of the war in Ukraine with the advance of the Russian troops puts pressure on the business of the Italian multinational that in Russia has two factories.
Just yesterday Pirelli presented i accounts 2021 decidedly above market and company forecasts with a net profit of 321.6 million euros, up sharply from 42.7 million in 2020 e revenues who have reached altitude 5.33 billion euros, up 23.9% from 4.3 billion in 2020.
Also there guidance 2022 travels in the same vein, judged in anticipation according to analysts on which, however, theunknown Ukraine, ie the impact of crisis in Eastern Europe. Especially with regards to gas and oilalready rallied on the main market squares.
War situation in Ukraine, Pirelli prepares actions to mitigate the tension
The automotive giant has thus already prepared some actions to mitigate these consequences: according to what the economic agency writes Radiocor, Pirelli indicated that the escalation of the crisis could lead to the guidance 2022 in lower part of the range indicated regarding profitability and cash generation: in particular, adjusted EBIT could be around 890 million, against a guidance of approx 890-940 million and cash generation before dividends at approx 450 million, 450-480 million the range indicated in the 2022 guidance.
During the presentation to the analysts, the CEO Marco Tronchetti Provera he specified that the impacts of the Ukrainian crisis on Pirelliby virtue of his presence in Russia, will be mainly indirect: “We do not see significant impacts on local operations, the direct impact concerns oil and energy prices. We may have some problems at the logistics level but not significant impacts at the local level” he said, recalling that the Russia accounts for approximately 3% of group revenues and less than 4% of the EBITDA margin.
Ukraine-Russia war, the words of analysts on the collapse of the Pirelli stock
According to what the economic news agency writes Radiocor, the Equita analysts, while confirming the “buy” recommendation on the stock, they slightly trim the price target on the stock, dropping to € 6.8.
Second Citigroup, which has a a “neutral” recommendation and a target of € 6.30the 2021 numbers were within expectations, thanks to a particularly positive fourth quarter, and the prospects for 2022 are in line with expectations. Jefferies instead raised the price target to € 5.90 (from 5) maintaining the “hold” rating and so did Deutsche Bank (“hold” with target raised to € 6.50).
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