FRANKFURT (dpa-AFX) - A few days after UBS, the analyst firm Jefferies also caused a stir on Friday with a change of favorites from Mercedes-Benz to BMW in the automotive sector. Jefferies expert Philippe Houchois upgraded BMW shares from "Hold" to "Buy", while removing his "Buy" recommendation for Mercedes. A more optimistic outlook for BMW in the coming year also lifted other sector stocks in addition to the Munich-based company's shares.

In the morning, BMW gained 2.2 percent in the DAX. Despite the downgrade, Mercedes rose by 1.3 percent. Volkswagen shares rose by 1.9 percent, Porsche AG climbed 1.7 percent higher and Continental was up 0.9 percent. Across Europe, car stocks were the strongest sector.

Jefferies analyst Houchois cited a better risk profile in terms of growth, customs prospects and CO2 compliance as the reason for his change of favorites to BMW. In addition, spending at the Munich-based company had reached a high point this year, while Mercedes-Benz, on the other hand, would first have to reposition itself and raise money. The return on cash was the highlight of Mercedes' investment story. Now the cash flow will be more in line with BMW again, wrote Houchois.

Since the beginning of the week, BMW's share price gains have now amounted to almost ten percent. Compared to last Friday's closing price, the Mercedes share price has only risen by two percent. Since the beginning of the year, however, all car stocks in the DAX are still clearly in the red and are among the biggest losers in the leading index in 2024.

This is because the industry is suffering not only from weak demand from abroad, but also from the weakening economy in Germany. German industry is still in crisis. Before the weekend, a surprising decline in production in October caused disappointment. In addition to energy production, the poor production trend was mainly attributable to the automotive industry. However, industry stocks on the stock market were able to defy this news.

And Houchois believes that car shares will continue to recover. With his increased price target of 85 euros, the Jefferies analyst still sees a good ten percent upside potential for BMW. For Mercedes shares, which have been downgraded to "hold", his noticeably lower price target of 60 euros is even eleven percent higher than the current price.

UBS analyst Patrick Hummel had already switched from Mercedes to BMW in an industry outlook for 2025 on Tuesday. Hummel appreciates the improved free cash flow and the particularly attractive return prospects of his new favorite BMW. Like Jefferies colleague Houchois, he sees more risks at Mercedes due to emissions regulations and the threat of US tariffs./niw/gl/nas