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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on PIRC

Pirelli & C. S.p.A.'s recent performance was driven by a 1.9% revenue increase and significant sustainability progress, despite navigating financial and geopolitical challenges. The company's plans to expand in the US, including a potential investment in the country, were initially hindered by its largest shareholder, China's state-owned Sinochem, which posed a hurdle due to regulatory concerns. However, a recent agreement between shareholders is expected to establish that Sinochem does not exercise control over the company, paving the way for Pirelli's US expansion ambitions. This development, combined with the company's strong revenue growth and sustainability progress, suggests a positive outlook for Pirelli.

1.c. Company Highlights

2. Pirelli's 9M 2025 Results Show Resilience in Challenging Environment

Pirelli's 9-month 2025 results demonstrate the company's ability to navigate a challenging environment, with revenues reaching approximately EUR 5.2 billion, representing an organic growth of 3.7%. The growth was driven by a strong commercial strategy that gained market share in the high-value segment. Profitability stood at 16.1%, the best among peers, with net income improving by 8% to EUR 401 million. Earnings per share (EPS) came in at EUR 0.15, beating analyst estimates of EUR 0.13. The company's solid cash flow generation and debt reduction of approximately EUR 280 million year-on-year further underscore its financial resilience.

Publication Date: Nov -10

📋 Highlights
  • Revenue Growth and Organic Expansion: 9-month 2025 revenues reached EUR 5.2 billion with 3.7% organic growth, driven by high-value segment strength (79% of sales, +3% YoY).
  • Profitability Leadership: Net income rose 8% to EUR 401 million, achieving a 16.1% profitability margin, the highest in the industry.
  • Strategic Partnerships and Innovation: Signed Cyber Tyre agreement with Aston Martin and won Tech Breakthrough awards; partnerships with Audi, McLaren, and Pagani confirmed for high-tech integration.
  • Cash Flow and Debt Management: Generated EUR 141 million cash flow in Q3 2025 and reduced debt by EUR 280 million YoY, with net debt/EBITDA near 1:1.
  • 2025 Targets and Sustainability: Maintained 16% profitability guidance, EUR 6.7–6.8 billion revenue forecast, and aims to cut Scope 1/2 emissions by 60% by year-end.

Segment Performance

The high-value segment, now accounting for 79% of group sales, grew 3 percentage points year-on-year. Pirelli's focus on this segment is paying off, with the company signing an agreement with Aston Martin to integrate Cyber Tyre technology into their models. As Andrea Livio Casaluci noted, "all logos shown are already partnered for Cyber Tyre supply," highlighting the company's progress in its technological advancements.

Outlook and Guidance

Pirelli confirmed its targets for 2025, with forecasted revenues between EUR 6.7 billion and EUR 6.8 billion, and profitability around 16%. The company expects investments to be around EUR 420 million, with a cash generation of around EUR 550 million. For 2026, Pirelli plans to continue its efficiency plan, including automation, digitization, and electrification of factories, and expects a tailwind on raw materials.

Valuation and Metrics

With a P/E Ratio of 12.39 and an EV/EBITDA of 6.25, Pirelli's valuation appears reasonable. The company's ROE of 8.79% and ROIC of 6.34% indicate a decent return on equity and invested capital. Analysts estimate next year's revenue growth at 0.9%, which may be a conservative estimate given Pirelli's current momentum. The Dividend Yield of 4.05% adds to the stock's attractiveness.

Competitive Landscape and Strategy

Pirelli's focus on the high-value segment has allowed it to maintain a technology gap with Chinese tire makers, who are growing in volumes and market share but are not affecting the high-tech segment. The company is accelerating its exit from the lower segment and streamlining its organization, particularly in South America where Chinese imports are increasing.

Financial Position

Pirelli's balance sheet has improved, with a net debt/EBITDA ratio close to 1:1. The company will consider options for using its cash, including potential dividend increases or buybacks. With a Free Cash Flow Yield of 16.55%, Pirelli's cash generation capabilities are attractive to investors.

3. NewsRoom

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Pirelli & C SpA (PLLIF) Q3 2025 Earnings Call Highlights: Strong Revenue Growth Amidst ...

Nov -09

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Pirelli & C (BIT:PIRC) and Aston Martin Collaborate to Integrate Cyber Tyre Technology

Sep -12

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ASTON MARTIN TO ADOPT PIRELLI CYBER™ TYRE TECHNOLOGY

Sep -11

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Italy's Pirelli to supply carmaker Aston Martin with Cyber Tyre technology

Sep -11

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Is Pirelli (BIT:PIRC) Still Undervalued After Its Recent Steady Share Price Climb?

Sep -09

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European Stock Futures Climb After EU Clinches US Trade Deal

Jul -28

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All Lucid Airs Gain Access to 23,500+ Tesla Superchargers; 2026 Lucid Air Lineup Continues Range and Efficiency Leadership

Jul -22

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JLR to equip sustainable automotive tyres with 70% recycled materials

Jul -10

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.81%)

6. Segments

Tyres

Expected Growth: 1.8%

Pirelli's 1.8% growth in tyre sales is driven by increasing demand for premium tyres, particularly in the high-performance and SUV segments. Additionally, the company's focus on innovation, such as its Cyber Tyre technology, and strategic partnerships with luxury car manufacturers are contributing to its growth.

Services

Expected Growth: 2.2%

Pirelli & C. S.p.A.'s 2.2% growth is driven by increasing demand for premium tires, expansion in high-growth markets, and a focus on sustainable and digital solutions. Additionally, the company's diversification into adjacent businesses, such as motorsport and bike tires, contributes to its growth momentum.

7. Detailed Products

High-Performance Tires

High-performance tires designed for high-speed driving, providing exceptional handling and braking performance.

Winter Tires

Tires specifically designed for winter conditions, providing improved traction, braking, and control on snow and ice.

All-Season Tires

Tires designed to provide a balance of performance, comfort, and durability in various driving conditions, including dry, wet, and light snow.

Motorcycle Tires

Tires specifically designed for motorcycles, providing improved grip, handling, and braking performance.

Bicycle Tires

Tires designed for bicycles, offering improved grip, comfort, and durability for various types of cycling, including road, mountain, and commuting.

Veloce Tires

High-performance tires designed for luxury and high-performance vehicles, providing exceptional handling and braking performance.

Scorpion Tires

Tires designed for SUVs and light trucks, providing improved traction, braking, and durability in various driving conditions.

8. Pirelli & C. S.p.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Pirelli & C. S.p.A. faces moderate threat from substitutes, as customers have limited alternatives for high-performance tires. However, the increasing popularity of electric vehicles and autonomous driving may lead to new substitutes in the future.

Bargaining Power Of Customers

Pirelli & C. S.p.A. has a diverse customer base, including OEMs and aftermarket customers, which reduces the bargaining power of individual customers. Additionally, the company's premium brand image and high-performance products limit customers' ability to negotiate prices.

Bargaining Power Of Suppliers

Pirelli & C. S.p.A. relies on a few large suppliers for raw materials, which gives them some bargaining power. However, the company's long-term contracts and strategic partnerships mitigate this risk.

Threat Of New Entrants

The tire industry has high barriers to entry, including significant capital investments, technological expertise, and regulatory compliance. This limits the threat of new entrants and allows Pirelli & C. S.p.A. to maintain its market position.

Intensity Of Rivalry

The tire industry is highly competitive, with several established players competing for market share. Pirelli & C. S.p.A. faces intense rivalry from companies like Michelin, Continental, and Goodyear, which drives innovation and pricing pressure.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 39.46%
Debt Cost 6.60%
Equity Weight 60.54%
Equity Cost 10.44%
WACC 8.93%
Leverage 65.17%

11. Quality Control: Pirelli & C. S.p.A. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Pirelli

A-Score: 6.4/10

Value: 7.6

Growth: 3.8

Quality: 5.5

Yield: 6.9

Momentum: 6.5

Volatility: 8.3

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CIE Automotive

A-Score: 5.8/10

Value: 6.6

Growth: 5.4

Quality: 2.6

Yield: 6.2

Momentum: 5.0

Volatility: 9.0

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Autoliv

A-Score: 5.7/10

Value: 5.4

Growth: 5.7

Quality: 5.2

Yield: 6.2

Momentum: 6.5

Volatility: 5.0

1-Year Total Return ->

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HELLA

A-Score: 4.8/10

Value: 3.6

Growth: 5.7

Quality: 4.6

Yield: 2.5

Momentum: 3.0

Volatility: 9.3

1-Year Total Return ->

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Stock-Card
Continental

A-Score: 4.7/10

Value: 7.7

Growth: 3.3

Quality: 4.6

Yield: 5.6

Momentum: 4.0

Volatility: 3.0

1-Year Total Return ->

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Knorr-Bremse

A-Score: 4.5/10

Value: 3.8

Growth: 3.4

Quality: 5.2

Yield: 3.8

Momentum: 4.0

Volatility: 6.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

6.07$

Current Price

6.07$

Potential

-0.00%

Expected Cash-Flows