China poses risk amid auto sector recovery; Berenberg downgrades BMW, Renault

Dr Ing hc F Porsche AG

19/01/2026 06:59

** Berenberg downgrades BMW BMWG.DE and Renault RENA.PA to "hold" from "buy", citing a "palpable" risk from Chinese competition amid a broader auto sector recovery

** It expects 2026 to deliver the sector's first earnings growth in three years, aided by cost-efficient platforms and a prolonged hybrid and internal combustion engine cycle

** While this is set to be another transition year for the sector, Chinese rivals continue to pose a threat to legacy carmakers, it says

** It sees BMW's valuation as "full" and says the German group's guidance for a stabilisation in China for 2026 may be overly optimistic

** It adds Renault has "undeservedly failed to rerate" despite strong execution; meanwhile, strategic challenges like electrification and price pressures have become a risk for the French automaker

SECTOR RATINGS AND PRICE TARGETS

COMPANY
RATING
OLD RATING
PT
OLD PT
BMW
Hold
Buy
EUR 92
-
Ferrari RACE.MI
Buy
-
EUR 381
-
Mercedes-Benz MBGn.DE
Hold
-
EUR 63
EUR 60
Porsche P911_p.DE
Hold
-
EUR 47
EUR 48
Renault
Hold
Buy
EUR 38
EUR 45
Stellantis STLAM.MI
Buy
-
EUR 10
EUR 9.50
Volkswagen VOWG.DE
Buy
-
EUR 118
EUR 113

(Reporting by Mathias de Rozario in Gdansk)

((mathias.derozario@thomsonreuters.com))