BMW: Oddo BHF cuts target after profit warning

(CercleFinance.com) - Oddo BHF maintains its 'neutral' rating on BMW shares, with a price target lowered from 90 to 75 euros.


As a reminder, BMW yesterday issued a profit warning on its annual guidance, attributed to a failure in its braking systems (Integrated Braking System developed by Continental) which will impact S2 deliveries and generate warranty costs ('high-triple digit ME), as well as) a still gloomy environment in China.

The Group is therefore revising its Auto 2024 guidance downwards, anticipating "slightly lower" volumes (i.e. a range of -1 to -5% according to the Group's definition) vs. "slightly higher" volumes, as well as an EBIT margin of 6 to 7% vs. 8 to 10% previously.

"Overall, having aligned ourselves with the mid-range of the guidance, we are adjusting our 2024 EBIT downwards by 20%, placing us 18% below the pre-announcement consensus", says Oddo BHF.

It should be noted that it is difficult to interpret this profit warning clearly, since the Group has not specified the portion attributable to the braking system problem and the portion attributable to the environment in China', points out the broker.

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