Pirelli vs Hankook Equity Valuation • Giuliano Cerullo

Overview

Comparative investment case on two listed tyre makers, Pirelli and Hankook (€6.8bn and €6.4bn of tyre revenue), assessing financial performance, valuation, US expansion projects and ESG profile to deliver an investment recommendation.

The project was the final course project for Investment & Financing Strategy at EM Normandie Business School, delivered in four outputs:

Slide deck .pdf fileSummary slide deck presenting the analysis and final recommendationOpen PDF Report .pdf fileFull analytical report (20 pages) covering methodology and results, with annexes on assumption limits, sensitivity analysis and project simulationsOpen PDF Excel model .xlsx fileExcel model with all computations: Pirelli_Hankook_Valuation_Model.xlsxDownload Dashboard interactive web appInteractive dashboard with a project simulator and live market dataOpen

Key Tasks

Ratio analysis of profitability, efficiency and financial structure for both companies
WACC estimation via CAPM with country risk premium
5-year DCF with sensitivity analysis, benchmarked against sector multiples
Scenario-based NPV/IRR of each company’s US plant expansion
ESG assessment: decarbonisation targets, CDP rating, supply chain traceability
Interactive valuation dashboard with project simulator and live market data

Core Insights

WACC of 7.6% for Pirelli and 5.9% for Hankook, with DCF implying +69% and +418% upside

Pirelli’s $1.2bn Georgia plant creates value (NPV +$405m, IRR 12.2%), Hankook’s $1.6bn Tennessee plant does not (NPV −$90m, IRR 5.3%)

Interactive dashboard built as a Claude artifact with a project simulator to test alternative investment scenarios by adjusting key assumptions such as capex, capacity, pricing and discount rate, plus valuation multiples refreshed three times a day with live market prices

Recommendation: Pirelli as a core holding, Hankook as a hold. Hankook looks cheaper on multiples, but Pirelli’s projects and ESG profile create more value.