Barclays downgrades European autos sector to Negative on tariff risk

Barclays downgraded to the European autos sector to Negative to Neutral, citing “material earnings risks.” Tariff risks are insufficiently priced into the shares, not fully reflected in consensus estimates, and could be worse than expected, the analyst tells investors in a research note. Barclays believes there is “significant earnings downside risk” in the European autos sector from tariffs. “The sector has been very resilient but there is now a disconnect between valuation and fundamentals,” the firm contends.