revenue growth
10 pct
FY 2018
official guidance
PIRELLI & C. S.P.A.
Last · Milan€6.565-0.03 (-0.45%)stale · yahoo · 137h ago
Market cap€7.1B1.08B sh
P/E · TTM13.1fwd 11.3 · eps 0.50
Beta1.05vs S&P 500
Div yield3.64%annual · TTM
52w range
€5.31€7.165
Volume100.0Ksession
| Revenue | €6.8B |
|---|---|
| Operating income | €891.2M |
| Net income | €497.5M |
| Free cash flow | €953.5M |
| Operating margin | 13.2% |
| Net margin | 7.3% |
| Return on equity | 7.9% |
| Period | 2025 |
Loading chart…
OpenFilings analyst
Our analyst
Agentic read of the latest earnings call — recommendation updates when we process a new transcript. Research synthesis, not investment advice.
BuyHoldSell
Strong execution is offset by high leverage, material FX/raw-material exposure and unresolved competitive and pricing questions.
Pirelli delivered strong 2017 execution, with adjusted EBIT before start-up costs up 10% to €927 million, 6.9% price/mix, and High Value at 58% of revenue and ~83% of EBIT.
2018 guidance is solid—organic revenue growth around 10% (at least 6% including FX) and adjusted EBIT around €1 billion—but the thesis is already dependent on sustained mix gains to offset €95 million of raw-material and FX headwinds, while leverage remains high at 2.7x. Hold: operational momentum is credible, but competitive positioning, pricing quality and cash conversion need further proof.
Themes
- High Value Strategy
- Price Mix
- Raw Material Headwinds
- Fx Exposure
- Leverage
- Competitive Positioning
Near term
2018 FX headwind is expected to be 3.5%-4%, with the negative impact concentrated in the first half; reported growth may therefore lag organic performance.
Price/mix guidance of 6.5%-7.5% is expected to be driven mainly by mix and continued Standard-capacity reduction, but management would not disclose the price/mix split.
Raw-material and local-currency effects are expected to create a €95 million EBIT headwind, including €55 million from commodities and €40 million from FX.
Working-capital support should be less favorable: management plans to reduce reliance on payables, while 2017 cash flow benefited from strong collections and reverse factoring.
LatAm is recovering from a low base, but management explicitly said it is not yet a booming market.
Longer term
High Value growth remains the core moat: more than 800 homologation projects are in the pipeline through 2020, with over 65% of current Premium/Prestige projects at 19 inches or larger.
Capacity conversion is strategically supportive, with 2018 plans for roughly 3.5 million additional High Value pieces through Brazil/China conversions and new capacity in Romania and Mexico.
OEM growth is still ahead of Replacement growth; management expects the mix to remain roughly 75% OEM and 25% Replacement for some years, making future replacement pull-through important to margins.
Pirelli reported U.S. High Value growth of 15.6% versus a market increase of roughly 10%-11%, but Michelin’s stronger reported growth and its Sumitomo distribution tie-up raise a continuing competitive risk.
Standard profitability is expected to improve only modestly to roughly 7%-7.5%; the larger benefit comes from shrinking Standard’s share of revenue and volumes rather than repairing the segment.
Red flags
Management deflected the analyst challenge that Michelin may be gaining more High Value share, arguing that the companies report different volume measures rather than providing a directly comparable market-share bridge.
The 6.5%-7.5% price/mix outlook was not split between price and mix; management acknowledged that mix is the largest component, leaving execution and pricing durability difficult to test.
Net financial position remains €3.2 billion and gross debt €4.5 billion, despite planned deleveraging to about 2.3x EBITDA; lower working-capital support could slow that improvement.
The €185 million 2018 financial-expense outlook is lower than prior guidance, but the benefit depends on refinancing and remains meaningful relative to earnings.
2017 net income benefited from an €80 million deferred-tax asset and other one-offs; the recurring tax rate is expected to be below 29%, materially above the reported 13.5% rate.
Forward outlook
revenue growth
6 pct
FY 2018
official guidance
revenue growth
3.5–4 pct
FY 2018
official guidance
ebitda
—
FY 2018
official guidance
operating margin
—
FY 2018
official guidance
revenue
—
FY 2018
official guidance
Recommendation history
OpenFilings analyst view from primary-source filings and earnings calls — not investment advice.
Upcoming earnings
4:30 PM UTC+1
Period
Sep 2026
Est. EPS
$0.12
Est. revenue
1.6B
Earnings transcripts
- Issuer IR
2852 FY 2017 Conference Call Transcript
PIRELLI & C. S.P.A.
- Issuer IR
1908 3Q 2017 Pirelli conference call transcript
PIRELLI & C. S.P.A.
- Issuer IR
3692 Pirelli Q1 2015 results conf call transcript online
PIRELLI & C. S.P.A.
- Issuer IR
3647 Pirelli Fy 2014 preliminary results transcript
PIRELLI & C. S.P.A.
- Issuer IR
3652 Pirelli 9M 2014 conference call transcript
PIRELLI & C. S.P.A.
- Issuer IR
H1 2014 earnings call transcript
PIRELLI & C. S.P.A.
Documents
FormReporting forFiledFlags
—2026-08-010