Barclays changes gear on EU car parts makers
24/11/2023 10:01
** Barclays switches to a "more offensive positioning" for
European auto parts suppliers, saying the worst is past for the
sector
** It upgrades Forvia FRVIA.PA to "overweight" from
"underweight", Continental CONG.DE and Gestamp GEST.MC to
"overweight" from "equal-weight"
** Forvia shares are up 1.3%, Continental rises 1.6%, and
Gestamp Automocion jumps 3.1% in the morning trade
** Barclays sees "a light at the end of the tunnel" for the
industry, expecting organic growth and operating leverage to
more than offset input cost headwinds, allowing earnings and
margins to grow
** Even if the global light vehicle production pauses, which
would prompt a sharper 2024 consensus adjustment, the outcome
would be the same for these three companies, the broker adds
** That said, Barclays maintains "equal-weight" rating on
Valeo VLOF.PA and downgrades Michelin MICP.PA to
"underweight" from "overweight"
** It cites lack of earnings catalyst for Michelin and
Valeo's exposure to the softening momentum in the battery
electric vehicles sector
(Reporting by Gaëlle Sheehan)
((gaelle.sheehan@thomsonreuters.com; +48 58 7785110;))