Who will emerge as winners in the auto industry under the tariff pressure? Deutsche Bank recommends Aptiv (APTV.US) and Dana (DAN.US).
1min read Despite the macroeconomic instability and tariff volatility in the current environment, deutsche bank highlighted the outperformance of several auto supplier stocks, giving aptiv (APTV.US) and dana (DAN.US) a "buy" rating.
Analysts Edison Yu and Winnie Dong noted that Aptiv has about $4.6 billion of goods flowing from Mexico to the US. However, in this situation, Aptiv will seek OEM customers to provide risk coverage immediately, which should minimize the net financial impact.
The analyst team emphasized: "In addition to the tariffs and policies of the Trump administration, investors' conversations are mainly focused on the separation of the EDS segment, while RemainCo hopes to shift from the automotive business to diversify into a multi-industry entity."
Deutsche Bank believes Dana's plan to sell its off-road business as a deleveraging tool will benefit investors. The company expects its asset divestiture and cost-cutting actions to save up to $300 million by 2026.
The bank also noted that Goodyear Tire & Rubber Company (GT.US) and American Axle & Manufacturing Holdings, Inc. (AXL.US) are auto stocks with upside potential after being oversold due to tariff concerns.
