JPM picks select suppliers, OEMs over tyre names in 2023
27/03/2023 10:59
** J.P.Morgan prefers select suppliers and Original
Equipment Manufacturers (OEMs) over tyre names in 2023,
expecting tyres to be at the forefront of any consumer weakness
in terms of demand and pricing, with competition from Asian
tyremakers rising
** OEMs still have record high and healthy order books
covering the next 2 quarters at least, and suppliers are
benefiting from a better-than-expected recovery in
global/European production volumes and inflation pass-through
mechanisms, it says
** JPM says it is more confident that the overall production
levels in Europe can be sustained into the end of the year
despite the uncertain macro and geopolitical events
** The brokerage upgrades its 2023 global light vehicle
production forecast to +3% (from +1%), but it is still 10% below
peak production levels: about 25% in Europe (excluding Russia),
12% in North America, about 5% in China
** JPM upgrades Plastic Omnium PLOF.PA to "neutral" from
"underweight" citing the increase in LVP production for 2023,
and increased growth in profitability of the lighting division
** It keeps "neutral" on BMW BMWG.DE , Continental
CONG.DE , Hella HLE.DE , Volvo VOLVb.ST , Volvo Car
VOLCARb.ST
** It names Faurecia EPED.PA , Vitesco VTSCn.DE , Stabilus
STM1.DE , Schaeffler SHA_p.DE (all four "overweight"-rated)
its highest conviction picks
** The broker also maintains "overweight" on Daimler Truck
DTGGe.DE , ElringKlinger ZILGn.DE , Mercedes Benz MBGn.DE ,
Nokian Tyres TYRES.HE , Novem NVM.DE , Pirelli PIRC.MI ,
Porsche PSHG_p.DE , Renault RENA.PA , Stellantis STLAM.MI ,
TI Fluid Systems TIFS.L , Valeo VLOF.PA
** Gestamp GEST.MC , Michelin MICP.PA are JPM's only
"underweight" stocks in the European autos sector
(Reporting by Marta Frackowiak)
((marta.frackowiak@thomsonreuters.com))