Bernstein sees scope for positive surprises from European tyremakers in 2025

BRIDGESTONE

05/12/2024 11:56

** Bernstein says that while 2025 will be another tough year
for European autos, it sees scope for positive surprises and
structural tailwinds for tyremakers
    ** Key catalysts for the sub-sector include positive
replacement market trends, pricing and tariffs which would
largely be net positive (except for Pirelli  PIRC.MI ) after
years of intense import competition, it says
    ** It expects replacement demand to outperform the tougher
original equipment market in 2025, and for cyclical markets to
recover in the second half of the year
    ** It upgrades Continental  CONG.DE  to "market perform"
from "underperform" on its strong exposure to improving
replacement trends in Europe, and no imminent negative catalyst
    ** It cuts Pirelli to "underperform" from "market perform"
citing its exposure to three company-specific risks: tariffs,
downtrading and Italian government investigating a major
shareholder
    ** It maintains "outperform" on Michelin  MICP.PA  and
Bridgestone  5108.T 
    ** It says EV growth will boost Michelin's structural growth
from premiumisation, while Bridgestone is more than 10% ahead of
peers on recycled/renewables materials

 (Reporting by Amir Orusov)
 ((Amir.orusov@thomsonreuters.com))