JPM sees globalization of automotive industry continuing in 2024
29/11/2023 07:58
** Looking into next year J.P.Morgan sees globalization of
the automotive industry to continue with new players from China
and North America taking market share
** JPM forecasts global car production rising by 1.8%
y/y in 2024 and expects that pricing power will see some small
deterioration yoy driven by a competitive battery electric
vehicles (BEV) environment
** Chrysler-parent Stellantis STLAM.MI is the brokerage's
preferred play, JPM says, pointing to its "excellence in
industrial execution and ability to protect earnings and cash"
** It cuts Volkswagen VOWG_p.DE to "neutral" from
"overweight", saying the transformation of the group is taking
longer than expected and seeing 2024 as another transition year
** Still, it keeps its "overweight" rating on Porsche
PSHG_p.DE , as the company will mark the turnaround of VW Group
** JPM upgrades BMW BMWG.DE to "overweight" as it offers
the highest yoy premium growth rate; while it sticks to its
"overweight" rating on Mercedes Benz MBGn.DE
** "Renault RENA.PA continues to be our top restructuring
investment case in the sector, which we expect to continue to
reap the benefits in 2024/2025", it adds, keeping its
"overweight" rating on the stock
** JPM sees suppliers to benefit from rising production
rates, price recoveries offsetting inflation costs and
restructuring actions including asset disposals
** It upgrades Gestamp GEST.MC and Michelin MICP.PA to
"neutral" from "underweight", saying that a higher level of
activities across the latter's plants will drive earnings
momentum, while it cuts Nokian TYRES.HE to "neutral" from
"overweight"
** The broker's top truck OEM remains Daimler Truck
DTGGe.DE , which should benefit from relatively strong pricing
power in 2024 and see a volume rebound in Latam
(Reporting by Paolo Laudani)
((Paolo.Laudani@thomsonreuters.com))