Background of the Analysis
UBS AG remains committed to its recommendation for BMW stock. Although the price target has been reduced from €87 to €78, the rating of “Buy” remains intact. This could spark new investor interest given the current market conditions.
UBS analyst Patrick Hummel has cut his earnings estimates for European automotive companies by 20 to 30 percent. This is based on the expectation of a decline in global car production in 2025, rather than the previously forecasted slight growth. The range for the actual outcome of car production is wide 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 good balance sheets and strong local operations, such as BMW and Autoliv. These recommendations suggest that UBS is betting on companies with solid finances and defensive positions in the automotive sector.
Current Market Situation of BMW Stock
At the time of the analysis’s publication, BMW stock was trading at approximately €68. This means it still has about 14% room to the new price target of €78. Since early 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. BMW’s upcoming Q1 2025 earnings release on May 7, 2025, could provide further insights into the company’s financial situation and further boost investor interest.