Written by Cláudio Afonso | LinkedIn | X
Tesla is Deutsche Bank’s top stock pick for 2025, while BYD and Geely are favored for the first half of the year, and Nio and Li Auto for the second half, analyst Tim Rokossa said in a research note on Monday.
“Automotive stocks are having a hard time globally. Unfortunately, we believe the industry is likely to head into another year of volatility and headwinds across regions,” Rokossa noted.
The firm expects “more noise of potential policy implications in the US, further restructuring announcements in Europe”, and “muted demand ex China and pricing to soften.”
Rokoss commented on the importance of strategic positioning in the automotive sector, despite current challenges.
“So why even bother to look at the space? Well, because with positioning in their favor, one can generate sizeable positive returns on automotive – relative and absolute – Renault, for example, would have generated 18% absolute and 33% outperforming ytd [year to date],” the analyst said in the note.
“Thinking ahead, we believe healthy balance sheets, cash return potential, self-help potential (restructuring is a key ’25 scheme), positive catalysts, as well as more moderate consensus expectations, screen as most attractive to enter the year. We maintain our stance that it is too early for a risk-on move into suppliers and remain overweight OEMs and Tires in Europe,” the analyst added.
Deutsche Bank says investors will “seek safe havens” within U.S. companies where “margin expansion and outgrowth are relatively shielded from price/mix and environment-driven headwinds.”
“In this context, we recommend select suppliers and would generally stay on the side-lines from traditional OEMs. We continue to like Tesla into 2025, ” the analyst wrote.
Deutsche Bank named Volkswagen, BMW, Michelin, and Pirelli as top stock picks in Europe, alongside Autoliv, Dana, and Tesla in the United States, and BYD and Geely in China for the first half of next year. The bank raised on Monday its price target on Tesla shares from $295 to $370.
Nio and Li Auto were picked by the firm for the second half of the year. Next year, Nio will launch its second sub-brand Firefly while Li Auto will expand its BEV lineup with the launch of its second fully electric model.
Written by Cláudio Afonso | LinkedIn | X
