Here are Bank of America’s top European auto picks for 2026
BofA's European automotive equity research head Horst Schneider unveiled key sector picks.
TL;DR
- European carmakers face a trade-off between potentially eased CO₂ rules and increased competition from China in 2026.
- Auto stocks in Europe have 'catch-up potential' due to anticipated regulation changes.
- Ferrari is identified as a key pick for 2026, offering a good risk-reward ratio despite a recent de-rating and cautious approach to its first EV launch.
- The European Commission is preparing to roll back 2035 restrictions on internal combustion engine vehicles, which could aid under-pressure carmakers.
- Companies like Volkswagen and Renault, heavily exposed to Europe, trade at low P/E multiples, suggesting potential for re-rating if CO₂ rules ease.
- Continental could offer a special dividend through the sale of its ContiTech division.
- Components supplier Aumovio is noted for trading at a significant discount to peers.