Automotive groups may soon be in line for a private equity pimping. Shares of carmakers like Stellantis (STLA.MI) and BMW (BMWG.DE) are suffering, as investors fret over a potential recession and falling car sales. It’s an opportunity for deep-pocketed funds or backers to steer them out of public markets altogether.
There are plenty of reasons to feel nervous about auto stocks.
The transition to electric vehicles may sap margins, while Chinese upstarts are threatening to grab market share.
Still, carmakers are already priced for the scrap heap, especially in Europe. Volkswagen (VOWG_p.DE), Mercedes Benz (MBGn.DE), BMW and Stellantis are trading on average at 5 times forward earnings, a roughly 25% discount to their 10-year average.
Full article at the link....