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Deutsche Bank Rates Piaggio a Buy (PAIGF)


Deutsche Bank is out with an analyst note this morning where they reiterate their Buy rating on shares of Piaggio & C. SpA (OTC: PIAGF); they have a $2.70 (EUR) price target on the stock.

Analysts cited the company’s recent announcement of the launch of Vespa India, which they consider positive because:

1) The Indian 2 wheelers market is the second largest in Asia (9.5m vehicles estimated in 2010, to be compared with c.2.5m vehicles in Europe) with the scooter segment accounting for 15%
2) Execution risk should be limited given the good knowledge of the local market (Piaggio currently has a leadership position in the 3/4 wheelers market with 40% market share)
3) Previous experience in Vietnam is supportive: the launch of Vespa in Vietnam in 2009 has been extremely successful and is currently the fastest growing angle of the company, so that we like the idea of replicating this project at a larger scale. We estimate that this project, assuming 15% EBITDA margin at regime should be worth approximately Euro 0.15/share.

Posted-In: Deutsche BankAnalyst Color Price Target Analyst Ratings


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