PARIS: Shares in ailing French carmaker PSA Peugeot Citroen soared on Thursday after US banking giant Goldman Sachs recommended that investors buy its stock.
In initial trading, the stock was up 5.78 percent to 6.59 euros, outperforming the French market which was up 0.97 percent.
Goldman Sachs raised the rating on the stock to "buy" from "neutral" previously, and the target price to 9 euros rather than 8.30 euros, according to Dow Jones Newswires.
The positive rating came even though PSA has been hard hit by a big decline of the European car market.
Last year it reported a record loss of 5.0 billion euros or $6.5 billion, and its finance arm had to be rescued with government support.
Goldman Sachs said however that there were signs showing that decline in European market had bottomed out in the second quarter.
It said that analysts were confident that the carmaker would be able to get a grip on the rate at which it was using up cash resources by end 2014, even though PSA faces a problem with liquidity at the moment.
The French carmaker's shares have oscillated wildly in recent days over rumours surrounding the ownership structure of the group.
A state-backed newspaper reported Wednesday that China's second-biggest automaker Dongfeng had held talks about buying a stake in the troubled French car firm.
A week ago, reports were circulating that US group General Motors could take control and inject cash.
GM has denied the speculation. (AFP)
