The latest Market Talks covering the Auto and Transport sector. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.

1321 GMT - Carmakers Volkswagen and Mercedes-Benz, chemicals giant BASF and DHL owner Deutsche Post are among the German companies at risk of issuing profit warnings this year, according to Warburg Research. Warburg analysts screened companies within their coverage that could revise their annual guidance, up or down, based on their performance so far in 2025 and expectations for the remainder of the year. The list of candidates to cut guidance also includes chemical companies Lanxess and Wacker Chemie, chemicals distributor Brenntag and biotechnology company Evotec. Profit warnings might be anticipated by the market for some companies, notably those affected by U.S. tariffs, the analysts say. On the bright side, Commerzbank and Deutsche Boerse are among the candidates to raise guidance, according to Warburg. The DAX is up 0.3%. (adria.calatayud@wsj.com)

1216 GMT - German arms maker Rheinmetall and Italy's aerospace and defense group Leonardo are the top picks among European defense companies, Mediobanca says. Rheinmetall stands out for its agility in capitalizing on growing demand, and has a product portfolio heavily skewed toward short-cycle programs such as ammunitions, infantry vehicles and air-defense systems, analysts Alessandro Pozzi and Marco Vitale note. Leonardo is seeking to adopt a multi-domain approach across all of its products, placing connectivity, artificial intelligence and cybersecurity at its core, the analysts say. This strategy could help Leonardo deliver improved margins in the coming years, Pozzi and Vitale add. Rheinmetall is up 3.7% while Leonardo advances 1.9%. (cristina.gallardo@wsj.com)

1133 GMT - The new defense spending target agreed by the 32 member countries of NATO at its annual summit on Wednesday marks the peak of the sentiment-driven rally experienced by European defense stocks, Shore Capital analyst Jamie Murray says. NATO countries set a new goal of spending 3.5% of their respective GDPs on defense and a further 1.5% on security-related matters by 2035. From this summit onward, the performance of European defense stocks will be driven by fundamentals, Murray says. NATO's spending surge creates a strong growth environment for defense companies, he adds. QinetiQ gains 4.8%, Rheinmetall is up 4.55%, Chemring rises 3%, Leonardo increases 2.3%, and BAE Systems advances 2%. (cristina.gallardo@wsj.com)

1130 GMT - Tesla's successful robotaxi launch in Austin, Texas, sets the stage for growth, Benchmark's Mickey Legg says in a research note. While limited, Legg believes the electric vehicle maker's robotaxi rollout demonstrates a controlled and safety-first approach that will be key to winning over regulators and public opinion, and will allow a rapid scale up if achieved. Waymo, its main competitor in the robotaxi space, has the first mover advantage but the analyst says he's a believer in Tesla's camera-focused approach that is not only cost effective but also scalable. "In our view the company is undergoing an evolution from a trailblazing vehicle OEM to a high-tech automation and robotics company with unmatched domestic manufacturing scale," Legg says. (denny.jacob@wsj.com; @pennedbyden)

0919 GMT - Inchcape's unchanged guidance is reassuring, Peel Hunt analyst Andrew Nussey says in a research note. The automotive distributor expects another year of growth. This outlook implies that the near-term risks and opportunities from evolving components supply, competitive forces and market demand are manageable, Nussey says. In the long term, Inchcape can benefit from changes in trade tariffs. This is because if tariffs keep fluctuating, car manufacturers may prefer to rely on local partners like Inchcape instead of setting up new in-house distribution on in-house sales channels, the analyst says. (maitane.sardon@wsj.com)

0550 GMT - Asian airlines continue to face some risks from the Israel-Iran conflict but the impact will likely be minimal, Morningstar director Lorraine Tan says in a note. The disruptions to Europe-Asia routes for Singapore Airlines, which relies on Iranian airspace to connect both regions, meant the rerouting of flights, adding to travel time and increasing fuel consumption while pressuring margins, Tan says. All countries in the Middle East except Iran have reopened their airspaces, but travelers from Southeast Asia, South Asia and Australasia would likely seek to avoid transiting in Abu Dhabi, Dubai and Doha, Tan notes. This could help drive international flight demand toward SIA and Cathay Pacific, but demand will likely normalize as risks ease, Tan adds. (kimberley.kao@wsj.com)

0545 GMT - Hanwha Ocean's shares may be overvalued, Nomura analysts Eon Hwang and Heesoo Min write in a note. The South Korean shipbuilder's stock has already priced in market expectations that it may gain from strengthening U.S. government rules on rival Chinese shipyards and a business opportunity in the U.S. naval-fleet buildup, the analysts say. Still, they expect Hanwha's new contract wins to rise 17% to $11 billion in 2025, as demand for liquefied natural gas carriers remains solid on increased U.S. LNG supply. Nomura raises the stock's target price to KRW57,000 from KRW55,000 while maintaining a reduce rating. Shares are 3.5% lower at KRW79,600. (kwanwoo.jun@wsj.com)

0537 GMT - Singapore's corporates are expected to continue outperforming as it develops its hubs, adopts new technology and reforms its equities market, say Morgan Stanley analysts in a note. "Singapore is perceived to be defensive and well-positioned in a multi-polar world given its macro stability, strong governance and financial resilience." Shareholders' returns could be lifted by buybacks and dividends. Large caps should enjoy inflows from planned changes to Singapore's stock market and the beneficiaries include DBS, Sembcorp Industries, CapitaLand Ascendas REIT, Singapore Exchange and Genting Singapore. Grab, Sea, Singtel and Keppel Limited stand to gain from embracing new technology. Morgan Stanley reiterates its overweight position on Singapore's market and forecasts MSCI Singapore's return on equity to reach 14% by 2030, from 12%. (megan.cheah@wsj.com)

0253 GMT - Japanese equities could come under pressure as the end of the 90-day pause on U.S. tariffs draws nearer, and as a Tokyo-Washington trade pact has yet to be reached, Morningstar says. However, their base case is that the impact on most sectors in Japan is contained at 8% or less. "We expect that the U.S. is unlikely to be able to maintain higher tariffs given the risk to economic growth," writes Director Lorraine Tan. Instead, universal 10% reciprocal tariffs will likely remain. Morningstar reckons auto duties will ease over the next two years, but Japan's auto industry will see material valuation declines due to thin margins. That said, it stays positive on Japanese equities and expects equity returns to keep improving as companies pay more attention to capital allocation. (fabiana.negrinochoa@wsj.com)

0005 GMT - Aurizon's trading update is soft but not unexpected, says Citi analyst Samuel Seow. Aurizon's FY25 underlying Ebitda estimate of roughly A$1.575 billion compares with the Visible Alpha-compiled consensus of A$1.611 billion. The miss reflects lower network volumes and Bulk contract receivables, says Seow in a note. Depreciation and interest are also slightly higher than analysts envisaged. "Looking forward, Network miss will likely be looked through given regulatory recovery mechanisms in future years," Seow says. "However, Bulk business looks set for a change, with current CFO George Lippiatt switching to lead the under-performing business, replacing Anna Dartnell who has led Bulk since 2023." Citi has a neutral rating and A$3.40 target on Aurizon. The stock is down 1.3% at A$2.96. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

2236 GMT - ARB's newest bull is betting on a more confident consumer in Australia and the U.S. Jefferies upgrades the car-parts supplier to buy from hold, noting that sales of 4x4 parts and accessories returned to growth in Australia in 2H. "With the rate-cut cycle underway, ongoing solid 4x4 sales in both countries, and a ray of Middle East geopolitical hope, we now see a pick-up in discretionary spending looming just as ARB's been de-rated," analyst John Campbell says. ARB's share price has fallen some 35% to A$30.97 since the start of October. Jefferies lifts its price target by 4.3% to A$36.00/share. (david.winning@wsj.com; @dwinningWSJ)

1842 GMT - The new-vehicle sales pace in June is expected to finish near 15.3 million, up from the 15 million pace in June 2024, but below May's 15.6 million pace, Cox Automotive says. The seasonally adjusted annual rate, or SAAR, is expected to fall from April's 17.5 million average sales pace, Cox says. Second-quarter auto sales saw healthy results early in the quarter, Cox says, adding the full-year sales forecast of 15.7 million represents a slight decline from last year. That figure is also below Cox's initial 2025 forecast of 16.3 million. Charlie Chesbrough, senior economist at Cox Automotive, says "much of the pull-ahead demand that fired up sales in April and May has now been satiated, so consumer demand is expected to be weaker in the coming months." (stephen.nakrosis@wsj.com)

(END) Dow Jones Newswires

June 26, 2025 12:20 ET (16:20 GMT)

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