Barclays: Quotes of European carmakers have bottomed out


10/04/2024

The value of stocks of European auto companies has dropped significantly in recent months due to worsening financial predictions, but now they have hit rock bottom and are poised for a comeback, as stated by a team of analysts from British bank Barclays headed by Henning Cosman.



Marek Ślusarczyk
They mentioned that carmakers could be supported by the decrease in interest rates in major global economies and the significant economic stimulus introduced by Chinese authorities.

European car brands in China have already experienced structural challenges considered in current quotes and their shares have significant potential for growth, they stated.

The analysts noted that the global trend towards lower rates and Chinese stimulus is leading towards a soft landing, with the path of least resistance going upwards.

Mercedes relies the most on the Chinese market compared to other European car manufacturers, with China making up 33 percent of the company's sales in the first half of 2024. BMW has a percentage of 27, while Porsche has 18 percent.

Analysts upgraded their rating for BMW shares to 'at market level'. Simultaneously, they demoted Mercedes and Stellantis to the 'at market level' category, down from 'above market', and moved Porsche to 'below market'.

source: marketwatch.com