RBC Capital lifts BMW stock price target to EUR79 from EUR65

On Monday, RBC Capital Markets updated its outlook on Bayerische Motoren Werke AG (BMW (ETR:BMWG):GR) (OTC:BMWYY (OTC:BMWKY)), raising the price target from EUR65.00 to EUR79.00 while maintaining a Sector Perform rating. The adjustment comes as the firm recognizes the automotive company’s reaffirmed fiscal year 2025 guidance, which anticipates an automotive EBIT margin between 5% and 7%, alongside modest growth in vehicle deliveries propelled by new models.

BMW is bracing for margin pressures in the second quarter of 2025 due to tariffs, with the possibility of relief starting in July, although there is currently no formal agreement in place. The company is also projecting a significant financial impact resulting from foreign exchange and raw material costs, which is expected to reach into the mid-three-digit million euros.

The German automaker is making substantial investments in its U.S. operations, amounting to over $1.7 billion. These investments include $1 billion earmarked for upgrading the Spartanburg plant for electric vehicle (EV) production and an additional $700 million for the construction of a new battery assembly facility. BMW’s strategy aims to have six EV models assembled at the Spartanburg plant by 2030. The plant’s production capacity is set to rise by 65,000 vehicles, reaching a total of 465,000 annually, with a significant portion destined for export as well as domestic sales. This expansion not only underscores BMW’s commitment to EV production but also highlights the plant’s substantial local economic contributions, which may provide BMW with added leverage in future U.S. tariff negotiations.

Despite these positive developments, BMW faces ongoing risks, including the potential impact of tariffs, a challenging Chinese market, supply chain disruptions, and exchange rate fluctuations. In light of these factors, RBC Capital has applied a re-rated EV/EBITDA multiple of 2.0x, an increase from the previous 1.5x, to arrive at the revised price target.

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