BMW's Strategy is Evolution, not Revolution

Dow Jones10-01 17:35

0935 GMT - BMW's capital markets day highlighted an evolution, not revolution, Citi analysts write. The company laid out new plans and targets of 3%-5% auto EBIT margins for 2028 and 8%-10% for early next decade. Despite BMW's profitability falling to 25-year lows, even as global demand outside China remains robust, BMW's plans assume business as usual, requiring simply better execution on costs, Citi says. "Investor sentiment is clearly concerned with a much more structural industry deterioration, which would in turn require a much more structural BMW response - as especially VW has detailed in recent months." It seems likely that investors will remain cautious on BMW, Citi adds. The bank rates BMW at neutral with a 64 euro target price. Shares fall 0.4% to 55.10 euros.

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