BMW Earnings Call Boosts Shares 4% Amid Positive Outlook

BMW shares rose 4% after a positive pre-close earnings call. The company reported strong sales, with 2.45 million vehicles sold in 2024, driven by its BMW, MINI, and Rolls-Royce brands. Net sales were also boosted by the sale of financing services and motorcycle sales. The group had 33 production sites worldwide and a significant presence in Germany, Europe, China, and the United States.

BMW (ETR: BMWG) shares rose by 4% on July 2, 2025, following a positive pre-close earnings call. The company reported strong sales, with 2.45 million vehicles sold in 2024, driven by its BMW, MINI, and Rolls-Royce brands. Additionally, net sales were boosted by the sale of financing services and motorcycle sales. The BMW Group, which operates 33 production sites worldwide, has a significant presence in Germany, Europe, China, and the United States [2].

The earnings call highlighted the company’s robust performance, with BMW reporting a 5.0% margin in Q2 2025, ahead of expectations. The company’s Neue Klasse (NK) electric vehicle platform, which is expected to be unveiled at the upcoming Capital Markets Day on July 15-16, is seen as a potential catalyst for future growth. UBS, a leading financial services provider, has maintained a "buy" rating on BMW, citing the NK platform as a key factor that could serve as a new technological benchmark in battery range, charging, and efficiency [1].

UBS expects BMW to reveal key aspects of the NK platform during the CMD, including design, technology, advanced driver-assistance systems, production, and market rollout. The brokerage estimates that an additional 100,000 NK unit sales, particularly in Europe, could boost automotive EBIT by approximately 5%, net of increased depreciation and amortization. Despite external pressures such as trade tariffs and weaker China sales, UBS forecasts BMW will confirm its full-year 2025 guidance, targeting a 5–7% automotive EBIT margin.

Looking beyond 2025, UBS anticipates BMW will set out a medium-term roadmap to return to an 8–10% automotive EBIT margin by 2028. Factors include the scaling of NK, cost-cutting measures, and a gradual decline in capital expenditures. The end of China joint venture purchase price allocations in 2028, equivalent to 100 basis points of non-cash EBIT margin, should further support profitability. Improved free cash flow could sustain total shareholder returns near €5 billion annually.

UBS reiterated its €90 price target, based on a sum-of-the-parts model, and cited attractive valuation metrics. The forecast return over 12 months, including dividends, is 20.3%. Free cash flow yield for 2025 is estimated at 10%, and the company’s net cash is forecast to rise to €12.4 billion that year. UBS also projects a 2025 EBIT of €9.6 billion and diluted EPS of €9.61.

BMW remains UBS’s top pick among original equipment manufacturers due to its underappreciated NK potential, expected guidance confirmation, and strong cash return outlook.

References:
[1] https://www.investing.com/news/stock-market-news/bmw-stock-jumps-as-ubs-sees-upcoming-cmd-as-a-positive-catalyst-4127792
[2] https://www.linkedin.com/company/bmw-group/