BMW: Morgan Stanley downgrades to 'equal-weight'

(CercleFinance.com) - Morgan Stanley has downgraded BMW to "equal-weight" from "overweight" on Monday, citing the deterioration of risk-reward in the auto sector.


In a report on European carmakers, the broker said that, even though the prospect of a vaccine raises the industry's cyclical expectations for 2021, valuations remain structurally capped at current levels, with risk-reward starting to deteriorate.

Morgan Stanley adds that, unlike VW, BMW has chosen not to go directly down the battery electric vehicle (BEV) route, basing its strategy on plug-in hybrid electric vehicle (PHEV) models until approximately 2025 and then accelerating BEV model launches and capacities thereafter.

It has nudged up its target price on the stock to 66 euros from 64 euros.

BMW shares were flat in Frankfurt on Monday morning.

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