Quick Summary
- Berenberg lifted BMW to a Buy rating and increased its price target to €75 from €69, highlighting restructuring momentum and improved earnings foundation.
- BMW is currently valued at approximately 6x earnings, significantly under the automotive sector’s 13.9x average, with shares declining 34.7% so far this year.
- Stellantis received a downgrade to Hold, with analysts slashing the price target to €5.10 from €7.80 on disappointing North American operational performance.
- Volkswagen maintained its Buy recommendation; Renault, Porsche, and Mercedes-Benz remained at Hold ratings.
- Berenberg anticipates European automakers transitioning from earnings pressure toward operational efficiency, favorable policy changes, and strengthening product cycles.
Berenberg has elevated BMW to a Buy recommendation, establishing a fresh price objective of €75, increased from €69, as the firm’s analysts contend the automaker appears attractively priced following a challenging period for European car manufacturers.
Bayerische Motoren Werke AG, BMWYY
Shares of BMW have tumbled 34.7% year to date on Frankfurt’s exchange, currently valued at approximately 6x forward earnings. This represents a substantial discount to the automotive industry’s typical 13.9x multiple and an even wider gap versus the broader comparable group’s 39.9x valuation. According to Berenberg’s analysts Romain Gourvil and Tommy Whitfield, this valuation disparity presents compelling opportunity.
The research team references last June’s China-related earnings warning as a pivotal recalibration that has established BMW with a “more robust profitability foundation” as it approaches its capital markets presentation scheduled for late September.
BMW’s Neue Klasse vehicle architecture is demonstrating enhanced contribution profit margins. The analysts additionally noted indicators suggesting that research and development expenditures have reached their peak, positioning the company for stronger free cash flow generation ahead.
Regarding financial strength, BMW maintained €42.6 billion in automotive net cash as of mid-2026. Berenberg projects this financial cushion could enable shareholder distributions yielding approximately 10% across business cycles.
Stellantis Confronts U.S. Market Challenges
In contrast to BMW‘s positive rating revision, Stellantis experienced a reversal. Berenberg downgraded the automaker to Hold from Buy and dramatically reduced its price target to €5.10 from €7.80.
The primary concern centers on North American operations. Notwithstanding a rebound in sales volumes, profitability gains have failed to keep pace with shipment increases during the second quarter. Berenberg reduced its 2026-2028 operating income projections for Stellantis by approximately 15%.
Vehicle inventories in North America are climbing toward roughly 100 days of supply. The analysts cautioned that efforts to reduce excessive inventory levels could create headwinds for sales volume in coming periods.
Industry-Wide Perspective
Volkswagen retained its Buy designation. Berenberg highlighted ongoing improvements within its flagship brand operations and what analysts characterize as an underestimated localized manufacturing approach in China.
Renault, Porsche, and Mercedes-Benz each maintained Hold ratings without changes.
Looking at the European automotive landscape more broadly, Berenberg identifies evolving market dynamics. While downward earnings revisions have dominated recent narratives, the analysts believe attention is now pivoting toward supportive regulatory adjustments, expense reduction initiatives, and strengthening vehicle launches.
Product line refreshes are accelerating considerably. The automakers under Berenberg’s coverage are replacing approximately 25% of their model portfolios annually during 2026-2028, a marked increase from roughly 15% throughout the previous ten years.
Berenberg also identified potential growth avenues in defense technologies, data-center thermal management, power distribution systems, and humanoid robotics as sectors that could help counterbalance restructuring expenses. European suppliers Valeo and Schaeffler were specifically highlighted as companies well-positioned to capitalize on these trends.
BMW’s forthcoming capital markets day scheduled for late September represents the next significant milestone where investors will seek additional clarity regarding efficiency objectives and platform development roadmap.
The post Berenberg Elevates BMW Stock Rating While Downgrading Stellantis Amid North American Struggles appeared first on Blockonomi.
