JPM sees continued globalisation as it maps out 2025 view for European autos
27/11/2024 07:03
** Laying out its 2025 outlook for the European auto sector,
J.P.Morgan says globalisation will continue, with emerging
global players such as Tesla TSLA.O , BYD 002594.SZ and SAIC
600104.SS taking market share across regions
** It estimates limited production growth next year with
global car production rising by just 1% y/y, and falling 2% in
Europe
** 2025 will be marked by trade tensions across Europe,
China and the U.S., a slower than expected transition into EVs
globally and Chinese OEMs taking market share across all regions
except the U.S., it says
** It expects investors to continue look for strong FCF
generative companies, those that pay dividends and buy back
shares, which are most likely to be found across OEMs, truck and
tire names
** Among truck OEMs, it upgrades Volvo VOLVb.ST to
"overweight" from "neutral", keeps "overweight" on Daimler Truck
DTGGe.DE and "neutral" on Traton 8TRA.DE and Iveco IVG.MI
** It thinks Stellantis' STLAM.MI restructuring will gain
momentum in 2025 and keeps it at "overweight" along with other
OEMs as it sees Renault RENA.PA benefiting from strong product
portfolio and restructuring
** Auto suppliers will focus on cost cutting moves to improve
earnings and cash profile, especially in Europe, it adds
** In that space, its top picks are "overweight"-rated
Forvia FRVIA.PA , Continental CONG.DE and Pirelli PIRC.MI
** It keeps "neutral" on Schaeffler SHA0.DE , Dowlais
DWL.L , Gestamp GEST.MC , Aston Martin AML.L and Michelin
MICP.PA
** Among small and mid-cap stocks, its strongest
"overweight" names are OPMobility OPM.PA and Stabilus
STM1.DE ; it cuts Nokian Tyres TYRES.HE to "underweight" from
"neutral"
(Reporting by Anna Pruchnicka)
((anna.pruchnicka@tr.com))