(Bloomberg) --
European auto stocks are emerging as a surprise winner as the coronavirus pandemic grinds on, with some analysts saying the outbreak is causing changes in consumer behavior that bode well for the industry and for share prices.
The Stoxx 600 Automobiles & Parts Index has gained 13% this quarter, the best performance among 19 industry groups in the wider regional equity benchmark, which is up 2%. Every member of the gauge is up since the start of July, led by Germany’s Daimler AG, Finnish tire producer Nokian Renkaat Oyj and French parts maker Valeo SA. The car index is still down 13% for the year.
China’s “spectacular comeback,” a second quarter that was “not quite as disastrous as feared,” stimulus measures in countries including Germany and France and the low valuation of the sector are among the reasons for the outperformance, said Bankhaus Metzler analyst Juergen Pieper.
“Recovery and outperformance should continue,” according to Pieper. “E-mobility is beginning to boom, which gives the sector a tech appeal and valuation could go up because of that.”
READ: EVs Outpacing Combustion Car Sales in the Covid Era: BNEF Chart
Changes that the pandemic is bringing about in people’s behavior, such as possible population shifts out of cities, also are a potential boost to vehicle demand.
“Simply speaking, people will fly less, use less public transport and will drive more,” Sanford C. Bernstein & Co. analysts Arndt Ellinghorst and Thanos Hadjiantonis said in a note on Wednesday. “Earnings and cash flows will bounce back.”
For 30 years, air travel has grown rapidly at the expense of passenger cars. Now, even a slight increase in the percentage of travel done by car can lead to a material increase in sales, according to Bernstein. Some companies could be back at their pre-Covid earnings level by 2021 or 2022, the analysts said.
For more articles like this, please visit us at bloomberg.com
Subscribe now to stay ahead with the most trusted business news source.
©2020 Bloomberg L.P.
"auto" - Google News
September 10, 2020 at 01:03PM
https://ift.tt/33j2GPS
Auto Stocks Bounce Back as Virus Seen Fueling Travel By Car - Yahoo Finance
"auto" - Google News
https://ift.tt/2Xb9Q5a
https://ift.tt/2SvsFPt
Bagikan Berita Ini
0 Response to "Auto Stocks Bounce Back as Virus Seen Fueling Travel By Car - Yahoo Finance"
Post a Comment