TLDR
- BMW stock rose over 6% after Q1 results beat analyst expectations on margins and cash flow
- Pre-tax profit of €2.3B topped the €2.2B consensus, despite a 25% year-on-year drop
- Automotive EBIT margin came in at 5%, above the forecast 4.7%
- Automotive free cash flow nearly doubled to €777M as capital spending fell sharply
- BMW maintained its full-year guidance of a 4–6% automotive EBIT margin
BMW reported Q1 2026 pre-tax profit of €2.3 billion, beating analyst consensus of €2.2 billion. The stock responded sharply, climbing more than 6% on Wednesday to trade around €82.
BMW kept its 2026 outlook unchanged, with strong Europe demand helping offset weakness in China.
Its auto EBIT margin was 5% in Q1, while the company said order intake in Europe hit a record.
BMW also said tariffs will cut its auto margin by about 1.25 points this year. pic.twitter.com/QKC71rUg5V
— Wall St Engine (@wallstengine) May 6, 2026
Group revenue fell 8.1% to €31 billion, and EBIT dropped 36% year-on-year to €2 billion. Those are ugly headline numbers — but investors looked past them.
The core automotive segment was the bright spot. Its EBIT margin hit 5.0%, topping the analyst forecast of 4.7% and sitting comfortably within BMW’s full-year target range of 4–6%.
Bayerische Motoren Werke AG, BMW.DE
The motorcycles unit also outperformed, posting an 11.4% margin.
Free cash flow was the other standout figure. Automotive free cash flow nearly doubled to €777 million, helped by a steep drop in capital expenditure — from €2.83 billion a year ago to €1.73 billion — as investment in new EV platforms began to level off.
BMW said it expects full-year automotive free cash flow to exceed €4.5 billion.
The financial services division was the weakest part of the report. Profit before tax there fell 41% to €381 million, hit by a provision tied to a UK motor finance compensation scheme. Analysts largely treated the charge as a one-off.
Vehicle Sales Under Pressure
Global deliveries fell 3.5% to around 566,000 units in Q1. China remains the toughest market — sales there dropped 12.5% in 2025, and BMW expects volumes to stay broadly flat in 2026.
Battery electric vehicle volumes fell 20% in the quarter, reflecting shifting demand and subsidy changes in key markets.
US deliveries of BMW and MINI fell 4.3% to 90,492 units. US import tariffs of 25% on European vehicles are a headwind, though BMW’s Spartanburg plant in South Carolina provides some buffer.
Its Chinese-made Mini models remain exposed to EU anti-subsidy levies, adding costs in the low hundreds of millions of euros.
Valuation and Analyst Views
At current levels, BMW trades at roughly 6.4 times trailing earnings. Its 52-week range runs from €70.94 to €97.92, leaving it well off its peak.
A dividend of €4.40 per share is expected, with the stock going ex-dividend on May 14 — implying a yield of around 5.7% at current prices.
Morgan Stanley reiterated an overweight rating, pointing to improving cash generation and a solid margin outlook.
JP Morgan also holds an overweight rating with a price target of €100. RBC Capital Markets sits at hold with an €84 target, flagging raw material costs and currency risks.
Bernstein maintained a buy rating on May 4. The analyst consensus price target stands at €91.59, with 10 buys and four sells among covering analysts.
BMW maintained its full-year guidance, forecasting a further 5–9.9% decline in group pre-tax profit from the €10.2 billion recorded in 2025.
Mercedes-Benz reports its own Q1 2026 results shortly, which will offer a direct comparison on how German premium manufacturers are managing the same tariff and China headwinds.
🚨 Our MAY Stock Picks Are Live!
A new month means new opportunities. Our analysts have just released their top stock picks for AMay, highlighting companies with strong momentum that rank highly on our KO Score algorithm. We’re also now sharing trade ideas for both long-term and short-term investors, giving you more ways to spot potential opportunities in the market.
Sign up to Knockout Stocks today and get 50% off to unlock the full list and see which stocks made the cut.
Use coupon code Special50 for your exclusive discount!
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
