Explore Citigroup’s positive outlook on the European auto sector, addressing tariff concerns and growth opportunities despite challenges.
Analysts at Citigroup have revised their recommendation upward for the European automotive industry, forecasting it to be more resilient against the tariffs imposed by the Trump administration, especially in comparison to the automotive industries in the United States and China.
Strategic Upgrade to ‘Overweight’
Citigroup elevated its recommendation for the auto sector to ‘overweight’, expressing that ongoing diplomatic negotiations and potential tariff postponements could support European automakers’ stocks in regaining ground from their recent underperformance. The STOXX 600 auto and parts sub-index has seen a decline of 4.8% this year.
European Profitability More Secure
According to Citigroup strategists, the profitability of the European market remains better protected and is structurally less vulnerable compared to the profit pools in the US or China. This insight was shared in a note dated April 25.
Previously, Citi strategists had reduced their outlook on the European construction and energy sectors to ‘underweight’ from ‘neutral’.
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