BMW Is My Automotive Choice After Q1 '25

(16min)

Summary

  • BMW is deeply undervalued, offering a compelling 15% annualized return to 2027E, with a well-covered 5-6% yield and strong fundamentals.
  • The company leads legacy peers in EV penetration, boasts superior margins, and demonstrates operational flexibility through its multi-powertrain production lines.
  • Risks include China exposure and competition in entry-level premium segments, but BMW’s execution, cost control, and brand strength mitigate these concerns.
  • I maintain a €92/share price target and a "Buy" rating, seeing BMW as a top automotive pick for income and long-term growth despite sector volatility.
  • Looking for more investing ideas like this one? Get them exclusively at iREIT®+HOYA Capital. Learn More »

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Despite personally mostly driving Mercedes-Benz (OTCPK:MBGAF), my biggest investment in automotive is not Mercedes, but Bayerische Motoren Werke Aktiengesellschaft aka BMW (OTC:BMWKY, NEOE:BMW:CA). There are several reasons for

The company discussed in this article is only one potential investment in the sector. Members of iREIT on Alpha get access to investment ideas with upsides that I view as significantly higher/better than this one. Consider subscribing and learning more here.

This article was written by

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Wolf Report is a senior analyst and private portfolio manager with over 10 years of generating value ideas in European and North American markets.

He is a contributing author and analyst for the investing group iREIT®+HOYA Capital and Wide Moat Research LLC where in addition to the U.S. market, he covers the markets of Scandinavia, Germany, France, UK, Italy, Spain, Portugal and Eastern Europe in search of reasonably valued stock ideas.

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Analyst’s Disclosure:I/we have a beneficial long position in the shares of BMWKY. MBGAF, VWAGY either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

While this article may sound like financial advice, please observe that the author is not a CFA or in any way licensed to give financial advice. It may be structured as such, but it is not financial advice. Investors are required and expected to do their own due diligence and research prior to any investment. Short-term trading, options trading/investment and futures trading are potentially extremely risky investment styles. They generally are not appropriate for someone with limited capital, limited investment experience, or a lack of understanding for the necessary risk tolerance involved. I own the European/Scandinavian tickers (not the ADRs) of all European/Scandinavian companies listed in my articles. I own the Canadian tickers of all Canadian stocks I write about. Please note that investing in European/Non-US stocks comes with withholding tax risks specific to the company's domicile as well as your personal situation. Investors should always consult a tax professional as to the overall impact of dividend withholding taxes and ways to mitigate these.

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