STOCKS NEWS EUROPE-Bernstein recommends VW over BMW
Bernstein recommends that investors pick Volkswagen (Other OTC: VLKAF - news) shares over BMW (Berlin: BMW.BE - news) , changing its stance, saying market expectations for VW have become more realistic while BMW's outlook appears too bullish.
"VW has extensive exposure to a European market recovery, a U.S. business with massive room for improvement, a Porsche franchise with considerable growth potential and currency headwinds already baked into guidance," Bernstein analysts say in a note to clients.
They upgrade VW shares to "outperform" from "market-perform" and lift their share price target to 260 euros, while downgrading BMW to "market-perform" from "outperform", with an unchanged share price target of 100 euros.
They also lift Porsche preference shares to "outperform" from "market-perform" and lift their price target to 100 euros from 75 euros, in line with the higher VW price target.
Shares in VW are up 2.4 percent at the top of Germany's blue-chip DAX index in early trade, while BMW's stock is unchanged and Porsche is up 3.4 percent.
Reuters messaging rm://maria.sheahan.thomsonreuters.com@reuters.net