European automakers now consider global conditions for the sector to be even worse than expected at the start of the year. Stellantis and Aston Martin warned investors on Monday that the the expected profit for 2024 is significantly reducedas well as its margins which will not exceed 7% in the case of Stellantis, as announced by the company. The news took 12.9% of its share price this Monday, its worst session since March 2020, while Aston Martin lost 23% on the London Stock Exchange. Faced with this weak panorama of the European automobile, experts erase their hopes of recovery of the sector which collects less and less purchasing advice from analysis firms. In fact, only Mercedes offers a clear purchase recommendation to experts.
The disease suffered by Stellantis or Aston Martin is not unique. They are only the latest to announce a profit warning this month of September. In collaboration with the company which owns brands such as Fiat or Peugeot, the Volkswagen group, BMW and Mercedes-Benz They also acknowledged to investors that conditions in 2024 are too dire to maintain earnings expectations announced late last year or early this year. And this is mainly explained by the delicate situation in China and its low demand as well as competition in the electric vehicle segment.
Consumption in China is still far from showing normalized figures and the Asian giant is not expected to rise from its ashes in the short term, despite the latest efforts of the country’s authorities to save the real estate sector and boost its financial markets. Additionally, companies like Aston Martin recognize that supply chain disruptions and lack of parts from China are occurring again. “While the Chinese auto market ended the summer with a slow August, European manufacturers had a gloomy month. participation in China by European teams drops to 13.6%the lowest of our records”, commented the Deutsche Bank analysis team.
In this context, the market consensus collected by FactSet reduces valuations and eliminates buying advice within the European automotive sector. Now just Aston Martin and Mercedes They have a buy signalthough this Monday several analysis firms announced that they were examining the British luxury team, according to Bloomberg. Thus, Volkswagen, BMW, Stellantis, Lotus and Porche have a maintained recommendation, according to FactSet and on the basis of the criteria applied. elEconomista.es which divides expert recommendations into buy, hold or sell.
As the sector’s outlook deteriorated this year, market consensus target prices fell, almost equal to the price reflected by these companies on the stock market, which recorded its worst session in five months on Monday. So far this year, the The European automobile industry, a group listed on the Stoxx 600, fell by 8.7%. Meanwhile, during the same period, the price target of the big seven automakers was reduced by an average of 14.5%. Only Ferrari saw its stock valuations improve in 2024, while it was the other luxury-focused team, Aston Martin, where its average FactSet consensus price target fell the most by 27% through 2 p.m. (0.49 pounds sterling (2.99 euros). at the exchange rate). This implies a potential of 100% although, as noted above, there are analysis firms that reassess their valuations after the latter profit warning.
Thus, only Ferrari remains afloat so far this year with the 37.5% increase that the company accumulates in 2024 compared to last year. 40% that Stellantis has given since the first of the yearwhich places the company in the worst position in the European sector. With these prices, the attractiveness of the European automobile industry is reduced, while analysis firms prolong the sector’s bad streak until 2025.
On the other hand, publicly traded U.S. automakers suffer from similar problems to those in Europe. Ford leaves 12% in 2024 while General Motor advances 32%. Alongside their evolution on the stock market, their valuations also fall in both cases while these two companies have a hold recommendation. The major car manufacturers that still have a purchasing council outside the European continent are China. Geely, Kia, Hyundai and Toyotaaccording to FactSet.
