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On Wednesday, BofA Securities updated its financial outlook on Bayerische Motoren Werke AG (BMW (ETR:BMWG):GR) (OTC: BMWYY (OTC:BMWKY)), increasing the price target from EUR64.00 to EUR75.00. Despite this adjustment, the firm maintained its Underperform rating on the stock. The revision follows BMW’s Q4 results released on March 14, 2025, which analysts described as largely uneventful.
The focus, instead, was on BMW’s forecast for the fiscal year 2025. The company projected an automotive EBIT margin of 5-7%, which is slightly below the original consensus expectations of 6-8%. Additionally, BMW anticipates a year-over-year unit sales growth of 1% to 5%, aligning with BofA’s estimate of a 1% increase. The forecast also includes an automotive free cash flow of greater than €5 billion for the fiscal year, compared to the consensus of a 2% year-over-year increase and BofA’s estimate of a 0.8% rise.
BofA analysts noted that BMW’s guidance accounts for tariff burdens that could negatively impact the company’s financials. These include European Union import tariffs on Chinese battery electric vehicle (BEV) imports, primarily affecting the Mini brand, and a 25% U.S. import tariff on BMW vehicles manufactured in Mexico due to non-compliance with the United States-Mexico-Canada Agreement (USMCA). Both tariff issues are anticipated to cost BMW a mid-triple-digit million euro amount each, with BofA estimating a €400 million impact. Additionally, a €200 million effect is expected from increased U.S. steel import tariffs and Chinese SUV imports from the U.S.
Despite these challenges, BMW is optimistic about its sales prospects, expecting increased sales in Europe and the U.S., while predicting stable sales figures in China for the fiscal year. For the first quarter, the company anticipates its automotive EBIT margin to be at the higher end of the 5-7% range.
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