BMW's Credit and Margin Story Diverge as JPMorgan Cuts Target to EUR 68
Published on 11/06/2026 at 19:41 | Editorial boerse-global.de
JPMorgan has trimmed its price target on BMW from EUR 82 to EUR 68 while leaving its "Overweight" rating untouched, a split verdict that captures the awkwardness of the moment for the Munich carmaker. The cut, announced on Wednesday, followed the one-off charges BMW has flagged for its automotive unit. The shares were down 2.4% on the day.
Analyst Jose M. Asumendi folded the announced one-time items into his models and lowered his forecasts for adjusted operating profit in both 2026 and 2027. Even so, the house declined to shift its recommendation. Media reports tie the recalibration to the conference call held after the quarterly figures were published.
A Second Voice on the Quarter
Jefferies struck a different tone on Wednesday, reaffirming its "Hold" rating and EUR 60 target. Analyst Philippe Houchois noted that the automotive division's EBIT margin beat expectations, while free cash flow came in below what the market had hoped for. The two brokers thus agree on little beyond the direction of travel: margins held up better than feared, cash generation did not.
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S&P Moves First
The ratings side had already acted. S&P Global Ratings cut BMW AG to "A-" from "A" and set the outlook to negative, citing declining sales, competitive pressure in China and persistent earnings strain from US tariffs. The agency's move came a day before the target cut, and AFP reported the same headwinds — soft demand and intensifying competition in China — as a drag on German manufacturers more broadly.
The Numbers Behind the Noise
For the third quarter of 2026, BMW reported a group result before tax of EUR 2,083 million, down 10.6% from the prior-year period. Revenue fell 5.8% to EUR 30.45 billion, while operating profit dropped 29.7% to EUR 1.59 billion. The company delivered 551,075 vehicles, and the automotive segment's EBIT margin reached 3.4%. BMW pointed to the sales decline in China as a factor behind the quarterly result.
Guidance Takes the Hit
On Tuesday, BMW lowered its EBIT margin guidance for the automotive segment for the 2026 financial year to a range of -0.5% to +0.5%, down from the previous 1% to 3%. The company blamed expanded and intensified portfolio and structural measures whose costs will weigh on fourth-quarter earnings. On Wednesday it said it would accelerate those measures, which include a faster reduction of management functions and will hit the automotive segment's result on a non-operating basis.
Strip out the portfolio and structural charges, and BMW still expects an automotive EBIT margin above 2.0% for the final quarter. Its free cash flow forecast for the segment stands unchanged at more than EUR 2.5 billion. The group's 2026 report is scheduled for publication on 11 March 2027.
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