Background of the Analysis
UBS AG continues to stand by its recommendation for BMW stock. Although the price target has been lowered from 87 to 78 euros, the assessment remains “Buy.” This could pique interest from new investors given the current market conditions.
UBS analyst Patrick Hummel has reduced his earnings estimates for European car manufacturers by 20 to 30 percent. This is based on the expectation of a decline in global car production in 2025, rather than the previously projected slight growth. The range for the actual performance of car production is broad and remains particularly uncertain for the year 2026.
Strategic Recommendations
Hummel recommends a defensive strategy with tire manufacturers such as Michelin, Continental, and Pirelli, which are seen as stable. He also emphasizes the quality of companies with strong balance sheets and robust local activities, such as BMW and Autoliv. These recommendations suggest that UBS favors companies in the automotive sector with solid finances and defensive positions.
Current Market Situation of BMW Stock
At the time of the analysis’s release, BMW stock was trading at around 68 euros. This indicates that there is still about a 14% margin to the new price target of 78 euros. Since the beginning of 2025, the stock has fallen by about 13.6%, but the positive reaction to the UBS analysis could lead to a recovery.
Outlook
UBS’s decision to maintain the “Buy” rating could encourage investors to invest in BMW stock, especially if they are betting on long-term growth potential. The upcoming Q1 2025 earnings report from BMW on May 7, 2025, could provide further insights into the company’s financial situation and further boost investor interest.