(new: Xetra prices, more on VW/Porsche, classification)

FRANKFURT (dpa-AFX) - An analyst's change of favorites boosted BMW and weighed on Mercedes-Benz on Tuesday. Patrick Hummel from UBS switched from the Stuttgart-based company to the Munich-based company in his sector outlook for 2025. This was reflected in share prices: Around midday, BMW was up 1.5 percent on Xetra, while Mercedes-Benz fell by 1.2 percent. In addition, the Mercedes shares were downgraded by Barclays to a negative rating.

In his study, UBS expert Hummel assumes that the headwinds in the automotive sector will not abate in the coming year. However, he appreciates the improved free cash inflow and the particularly attractive yield prospects resulting from the cash holdings at his new favorite BMW. The return prospects for Mercedes-Benz are also good, but he fears a dilutive effect from investments in electric vehicles, which are still underestimated. He also sees more risks for the Stuttgart-based company due to emissions regulations and the threat of US tariffs.

Barclays also commented on the outlook across the sector on Tuesday, but was particularly conspicuous on Mercedes-Benz with a downgrade to a negative vote of "Underweight". Expert Henning Cosman remains neutral on the sector following his recent upgrade of the sector rating, citing resilient earnings prospects as a key factor. In this respect, he favors the manufacturers of particularly high-quality cars such as Ferrari or Porsche, while he is concerned about business in China and the USA, which is reflected in a downgrade for Mercedes.

BMW built on the previous day's strength with gains on Tuesday, while the overall trend in the sector remained mixed. Although Volkswagen shares were slightly up, those of the sports car subsidiary were recently down 0.4 percent. They were also among the losers in the DAX, which made headlines with its first rise above the 20,000-point mark.

The opinions of the two experts are divided on the two shares from the Volkswagen Group environment. While Hummel downgraded Porsche AG to "Neutral" on Tuesday, Cosman gave it an "Overweight" rating. The Barclays expert wrote that it was probably time for a re-entry near the share's record low. Analyst Patrick Hummel, on the other hand, stated in his study that the buy recommendation was running out of gas.

The two experts have been evaluating the VW parent company differently for some time: while UBS is already advising to sell, Barclays is positive with an "overweight" rating. Hummel argued that the Group's reorganization will be "a marathon". Barclays, on the other hand, even sees Wolfsburg as a favorite alongside Ferrari. Cosman argued that there would be short-term pain for the Wolfsburg-based company in favor of long-term benefits.

Any price gains in the automotive sector at the end of the stock market year are more likely to be seen as price cosmetics, even in the case of BMW. Despite the recovery of almost 12 percent since the November low, the Munich-based company's shares are still among the biggest DAX losers in 2024 with a discount of 27.5 percent, roughly on a par with the struggling Volkswagen Group. Only Mercedes-Benz is in a slightly better position with an annual discount of almost 16 percent./tih/bek/jha/