Story
Pirelli Stock Falls on JPMorgan Downgrade and Rising Cost Concerns
Shares of Pirelli (PIRC.MI) fell more than 2% in Milan trading after a combination of slowing growth in its first-half earnings report, a subsequent analyst downgrade, and rising cost pressures prompted a sell-off.
Earnings and Downgrade Drive Sell-off
The Italian tire manufacturer reported its H1 2026 results after the market close on July 29, which acted as a primary catalyst for the decline. While Pirelli maintained its full-year guidance, investors focused on a deceleration in organic growth during the second quarter to just 1.4%, excluding currency and hyperinflation effects.
Key details from the first-half report include:
- Net Sales: €3,495 million, remaining flat on a reported basis.
- Headwinds: The company faced €44 million in negative foreign exchange impacts and €65 million in inflation-related costs.
- Cost Outlook: Pirelli revised its full-year forecast for raw material costs, now expecting a €70 million headwind, a significant deterioration from its previous guidance.
AdCompounding the negative sentiment, JPMorgan downgraded Pirelli stock from "Overweight" to "Neutral" immediately following the earnings release. The bank, which set a price target of €7.20, cited the slowdown in organic growth and the more challenging cost environment as key reasons for its revised stance.
Governance and Market Headwinds
Adding to investor concerns, the H1 results were approved despite the dissenting votes of three directors affiliated with Chinese shareholders. According to the source, the directors objected to a declaration of control by MTP Spa contained within the financial report, highlighting an ongoing point of friction between the company's Italian and Chinese investor blocs.
The broader market environment offered no support for Pirelli. Milan's FTSE MIB index was trading lower, pressured by other disappointing earnings reports. Weakness among European auto-parts peers also weighed on sentiment, creating a confluence of factors that pushed Pirelli's shares down during the session.
Read next
More on Stocks
FTC Orders Walmart, Uber, Delta to Disclose Data on Personalized Pricing
The U.S. Federal Trade Commission is demanding nine major companies, including leading retail, travel, and gig economy firms, to provide information on how they use consumer data for setting individual prices and wages.
Google Launches Gemini 4 Carbon AI Model to Bolster Cybersecurity Capabilities
Alphabet's Google has unveiled Gemini 4 Carbon, its latest AI model specifically designed for advanced cybersecurity tasks like vulnerability detection and secure code generation. The launch escalates competition with rivals OpenAI and Anthropic in the enterprise AI market.
Oracle Shares Surge After Unveiling $225 Billion Revenue Target for 2030
Oracle stock rose sharply after the company presented a long-term financial outlook targeting at least $225 billion in annual revenue by fiscal 2030, driven by its expanding AI infrastructure business.
DOJ Scrutinizes Nvidia's $12.9B Hugging Face Deal Amid Broader Antitrust Probe, Sources Say
The U.S. Department of Justice is reportedly examining Nvidia's planned $12.93 billion acquisition of AI platform Hugging Face as part of a wider, ongoing antitrust investigation into the chipmaker's market conduct.