Europe's automotive sector has been under pressure since the start of the week, in the wake of the joint attack by the US and Israel on Iran. The reaction is a familiar one: in times of major geopolitical shock, investors cut exposure to cyclical stocks, seen as the most sensitive to an economic slowdown. Autos tick every box: reliance on household confidence, high capital intensity, and margins exposed to volumes. Adding to that is the immediate rise in oil prices, which drives up both logistics costs and consumers' expected spending, as well as the threat of supply-chain disruption.

But the move is not explained solely by geopolitics. Recent results from suppliers maintain high uncertainty. Forvia has just lost 18% over four sessions after publishing its 2026 outlook. This morning, Schaeffler is down over 15% after figures deemed disappointing and guidance received even more poorly. Nothing catastrophic, but hardly reassuring in an already tense environment. When the market turns nervous, it does not settle for "not so bad”: it focuses on vulnerabilities.

Cyclicality, weaker guidance and risks to consensus

The combination of both these factors is weighing heavily, all the more so as the auto industry-in the midst of a technological transition and facing sluggish demand in Europe-offers little visibility. Add to that overly optimistic assumptions in sector forecasts for 2026. Pierre-Yves Gauthier, head of AlphaValue, noted yesterday that profits at listed European companies were expected to rise by 13% this year. A level he viewed as extremely high, and one that partly relied on "an unlikely recovery in the automotive sector”. Negative signals from suppliers and events in the Middle East are highly likely to push sector consensus forecasts lower.

In Europe over five sessions, Schaeffler is down 22%, Forvia 18%, Valeo 14%, Renault 10%, Volkswagen 7% and Stellantis 6%.