JPM sees continued globalisation as it maps out 2025 view for European autos
** 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
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