VW/POM replace Daimler/Nokian as Most Preferred Stocks
We adjust our estimates and target prices across the board, raising 2016 and cutting 2017 for most names. We continue to recommend a selective exposure to Autos mainly through Michelin (European Selected List), VW (upgraded to Buy this morning and replacing Daimler among our Most Preferred Stocks) and Renault among large-cap stocks, and a few suppliers notably benefitting from reinforced OEM powertrain investments to lower emissions further. We keep our positive stance on POM (added to our Most Preferred Stocks today to replace Nokian), Faurecia, RHM, Norma, Sogefi and SHW. We downgrade Nokian from Buy to Hold after a strong performance in 2015. Our Least Preferred Stocks remain Volvo, CNH,Autoliv and Leoni. Kepler Cheuvreux Strategy’s view on the sector was raised from Underweight to Neutral on 30 November 2015 and is aligned with our stance