JPM says buy these 2 auto supplier stocks over Tesla

June 10, 2025 10:45 PM AEST | By Investing

Google News:

JPM says buy these 2 auto supplier stocks over Tesla — Image source: Kalkine Media

Recent News

Hansen Technologies Supports Major Transformation for Telefónica Germa...

Quantum Stocks rise as Nvidia CEO Huang says inflection is near

FT: Starbucks has seen "a lot of interest" in China business stake, CE...

China auto stocks rise as they pledge faster supplier payments

Investing.com -- JPMorgan analysts said in a note Tuesday that they recommend investors sell Tesla (NASDAQ:TSLA) and instead buy auto parts suppliers Aptiv (NYSE:APTV) and BorgWarner (NYSE:BWA), arguing that supplier shares offer "relative value."

Despite underperforming automakers since tariffs were announced, auto parts suppliers face "materially less regulatory headwind," according to the bank.

JPMorgan (NYSE:JPM) notes that shares of the average U.S.-based auto parts supplier have underperformed the S&P 500 and U.S. automakers since March 25, the day prior to official confirmation of 25% automotive sectoral tariffs.

This is despite the "direct burden of tariffs falling squarely on automakers and not suppliers."

Additionally, JPMorgan says other regulatory changes, such as the "seemingly likely termination of two separate EV subsidies," are expected to materially weigh on some automakers, potentially costing Tesla "up to roughly half of its global EBIT."

The analysts point out that "No company we cover has experienced as much decline in 2025 consensus EPS since March 25 as has Tesla (-32%)."

Moreover, they state that "the Tesla brand seems increasingly controversial, competition is intensifying (especially in China but also around the world) and the automaker recently experienced a key departure."

JPMorgan suggests "selling Underweight-rated TSLA and using the proceeds to buy what we view as superior risk/reward auto parts suppliers, including Overweight-rated Aptiv (APTV) and BorgWarner (BWA)."

They highlight that these suppliers "stand to benefit from long-term industry electrification," but offer "this secular growth leverage at a much more reasonable 9.3x and 7.6x P/E, respectively," compared to Tesla’s 141.2x.

This article first appeared in Investing.com

Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (“Kalkine Media, we or us”), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary.
The content published on Kalkine Media also includes feeds sourced from third-party providers. Kalkine does not assert any ownership rights over the content provided by these third-party sources. The inclusion of such feeds on the Website is for informational purposes only. Kalkine does not guarantee the accuracy, completeness, or reliability of the content obtained from third-party feeds. Furthermore, Kalkine Media shall not be held liable for any errors, omissions, or inaccuracies in the content obtained from third-party feeds, nor for any damages or losses arising from the use of such content.
Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyrighted to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have made reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.
This disclaimer is subject to change without notice. Users are advised to review this disclaimer periodically for any updates or modifications.