TLDR
- Berenberg upgraded BMW to Buy, raising its price target to €75 from €69, citing restructuring progress and a stronger earnings base.
- BMW trades at around 6x earnings, well below the auto industry average of 13.9x, and is down 34.7% year to date.
- Stellantis was downgraded to Hold, with its price target cut to €5.10 from €7.80 due to weak operating leverage in North America.
- Volkswagen was kept at Buy; Renault, Porsche and Mercedes-Benz held at Hold.
- Berenberg sees Europe’s auto sector shifting from earnings downgrades toward cost cuts, regulatory tailwinds and product momentum.
Berenberg has upgraded BMW to Buy, setting a new price target of €75, up from €69, as analysts argue the stock looks undervalued after a rough year for European autos.
Bayerische Motoren Werke AG, BMWYY
BMW’s stock is down 34.7% year to date on the Frankfurt exchange, trading at roughly 6x earnings. That compares to an auto industry average of around 13.9x and a broader peer group near 39.9x. Berenberg analysts Romain Gourvil and Tommy Whitfield say that gap looks too wide.
The analysts point to last June’s China-driven profit warning as a reset that now gives BMW a “sounder earnings base” heading into its late-September capital markets day.
BMW’s Neue Klasse platform is showing improving contribution margins. The analysts also flagged signs that research and development spending has peaked, which should support cash generation going forward.
On the balance sheet, BMW held €42.6 billion of automotive net cash at mid-2026. Berenberg says this could support a distribution yield of around 10% through the cycle.
Stellantis Faces North America Headwinds
While BMW got the upgrade, Stellantis went the other way. Berenberg cut it to Hold from Buy and slashed its price target to €5.10 from €7.80.
The issue is North America. Despite a volume recovery, margin improvement lagged shipment growth in the second quarter. Berenberg cut its 2026 to 2028 operating profit estimates for Stellantis by around 15%.
North American inventories are approaching roughly 100 days. Analysts warned that inventory destocking could become a volume headwind from here.
Broader Sector View
Volkswagen stayed at Buy. Berenberg cited continued progress in its core brand business and what it calls an underappreciated local-for-local strategy in China.
Renault, Porsche and Mercedes-Benz were all left at Hold.
On the wider sector, Berenberg sees catalysts shifting. Earnings downgrades have been the dominant theme, but analysts think the focus is now moving toward regulatory accommodation, cost cuts and product momentum.
Portfolio renewal is picking up speed. Covered automakers are replacing around 25% of their lineups annually in 2026 to 2028, up from roughly 15% over the prior decade.
Berenberg also flagged opportunities in defense, data-center cooling, energy management and humanoid robotics as areas that could offset restructuring costs. Valeo and Schaeffler were named as European names positioned to benefit.
BMW’s capital markets day at the end of September is the next key event investors will watch for more detail on cost targets and platform strategy.
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