Company Reports

Because of the strength of its intangible assets, including brand and intellectual property, BMW has a narrow economic moat rating. Brand strength has enabled premium pricing across all of BMW's products, while intellectual property supports the brand image with strong product execution, especially in powertrains.

Narrow-moat BMW capped off fiscal 2023 with a strong fourth quarter, reporting year-over-year sales and automotive operating income growth of 8.7% and 8.2%, respectively. However, the stock slipped during intraday trading as management stated that fiscal 2024 would be a year of heightened investment, expecting peak capital expenditures with respect to electrical vehicle technology. Nonetheless, we remain confident in BMW’s product portfolio and believe the company should be able to generate high-single-digit margins despite the significant investment ramp. As such, we reiterate our EUR 163 fair value estimate.

Narrow-moat BMW reported third-quarter earnings per share of EUR 4.20, beating the EUR 4.14 FactSet consensus EPS estimate by EUR 0.06 but down EUR 0.05 from the EUR 4.25 reported last year as the prior period benefited from accounting for the consolidation of Brilliance. Automotive volume increased 6% as supply chain disruption lessened, with all regions except China reporting gains and EVs soaring 93% year over year. Despite higher sales volume, automotive revenue declined 1%, as favorable pricing and mix were offset by negative currency, especially the RMB and USD. Organic automotive revenue growth was 7%. Consolidated revenue increased 3% to EUR 38.5 billion from EUR 37.2 billion on a 41% jump in financial services as reduced eliminations resulted from higher interest rates. Group revenue beat the FactSet consensus by about 3%.

Because of the strength of its intangible assets, including brand and intellectual property, BMW has a narrow economic moat rating. Brand strength has enabled premium pricing across all of BMW's products, while intellectual property supports the brand image with strong product execution, especially in powertrains.

In 2022, battery electric vehicles represented nearly 10% of global auto sales, up from a little less than 6% in 2021. Much of the growth occurred in China, which has been a leader in EV sales over the past decade. However, with national EV subsidies in China expiring in 2022 and far lower sales in the U.S. and Europe, the market questions if EV sales can continue to grow without subsides.

Narrow-moat BMW reported second-quarter earnings per share of EUR 4.40, missing the EUR 4.68 FactSet consensus EPS estimate by EUR 0.28 but up EUR 0.09 from the EUR 4.31 reported last year. Automotive volume increased 11% as the chip crunch lessened with all regions reporting gains. Despite higher sales volume, automotive revenue rose a disappointing 5% as favorable pricing and mix were offset by negative currency, especially the RMB, USD, and JPY. Consolidated revenue increased 7% to EUR 37.2 billion from EUR 34.8 billion on the 5% automotive increase with motorcycle revenue up 14% and an 18% rise in financial services. Group revenue beat the FactSet consensus by about 1%.

Because of the strength of its intangible assets, including brand and intellectual property, BMW has a narrow economic moat rating. Brand strength has enabled premium pricing across all of BMW's products, while intellectual property supports the brand image with strong product execution, especially in powertrains.

Because of the strength of its intangible assets, including brand and intellectual property, BMW has a narrow economic moat rating. Brand strength has enabled premium pricing across all of BMW's products, while intellectual property supports the brand image with strong product execution, especially in powertrains.

Narrow-moat BMW reported first-quarter earnings per share of EUR 5.31, beating the EUR 4.34 FactSet consensus EPS estimate by EUR 0.97 but down EUR 10.02 from EUR 15.33 EPS reported last year when the firm recorded a EUR 7.7 billion gain from the consolidation of BMW Brilliance Automotive. Automotive volume decreased 2% as the chip crunch lessened but weaker demand in Europe and China offset higher sales volume in the Americas. Despite the lower sales volume, automotive revenue rose 17% on the consolidation of BMW Brilliance Automotive (formerly joint venture equity income) as of Feb. 11, 2022, strong pricing, and favorable mix. Consolidated revenue increased 18% to EUR 36.9 billion from EUR 31.1 billion on the 17% automotive increase, a 17% increase in motorcycle revenue, a 4% rise in financial services, but a 14% reduction in eliminations. Group revenue beat the FactSet consensus by about 4%.

Because of the strength of its intangible assets, including brand and intellectual property, BMW has a narrow economic moat rating. Brand strength has enabled premium pricing across all of BMW's products, while intellectual property supports the brand image with strong product execution, especially in powertrains.

Because of the strength of its intangible assets, including brand and intellectual property, BMW has a narrow economic moat rating. Brand strength has enabled premium pricing across all of BMW's products, while intellectual property supports the brand image with strong product execution, especially in powertrains.

Narrow-moat BMW reported fourth-quarter earnings per share of EUR 3.44, slightly below the EUR 3.51 FactSet consensus EPS estimate by EUR 0.07, but up EUR 0.04 from EUR 3.40 EPS reported last year. We surmise the bottom-line shortfall was due to a 36% drop in financial services profitability on higher refinancing costs and increased credit risk provisioning. Automotive volume increased 11% as the chip crunch lessened but automotive revenue jumped 38% on the consolidation of BMW Brilliance Automotive (formerly joint venture equity income), strong pricing, and favorable mix. Consolidated revenue increased 39% to EUR 39.5 billion from EUR 28.4 billion on the 38% automotive jump, a 42% pop in motorcycle revenue, and a 5% rise in financial services. Group revenue beat the FactSet consensus by about 5%.

Because of the strength of its intangible assets, including brand and intellectual property, BMW has a narrow economic moat rating. Brand strength has enabled premium pricing across all of BMW's products, while intellectual property supports the brand image with strong product execution, especially in powertrains.

Narrow-moat BMW reported preliminary fourth-quarter earnings per share of EUR 3.44, slightly below the EUR 3.51 FactSet consensus EPS estimate by EUR 0.07 but up EUR 0.04 from EUR 3.40 EPS reported last year. We surmise the bottom-line shortfall was due to a 36% drop in financial services profitability on higher refinancing costs and increased credit risk provisioning. The company reports full results next week on March 15. Automotive volume increased 11% as the chip crunch lessened, but automotive revenue jumped 38% on the consolidation of BMW Brilliance Automotive (formerly joint venture equity income), strong pricing, and favorable mix. Consolidated revenue increased 39% to EUR 39.5 billion from EUR 28.4 billion on the 38% automotive jump, a 42% pop in motorcycle revenue, and a 5% rise in financial services. Group revenue beat the FactSet consensus by about 5%.

Narrow-moat BMW reported third-quarter earnings per share of EUR 4.25, EUR 0.12 ahead of the EUR 4.13 FactSet consensus estimate and up EUR 0.36 from EUR 3.89 EPS reported last year. Despite a 1% dip in automotive volume from the Ukraine crisis, chip crunch, and China COVID-19 lockdowns, consolidated revenue also beat the consensus by 5% and jumped 35% to EUR 37.2 billion on a 42% increase in industrial revenue. Excluding the consolidation of BBA, we estimate automotive volume declined 7% and consolidated revenue increased 4% on continued strong pricing and mix.

Because of the strength of its intangible assets, including brand and intellectual property, BMW has a narrow economic moat rating. Brand strength has enabled premium pricing across all of BMW's products, while intellectual property supports the brand image with strong product execution, especially in powertrains.

Narrow-moat BMW reported second-quarter earnings per share of EUR 4.30, well ahead of the EUR 3.67 FactSet consensus estimate by EUR 0.63 but down EUR 2.93 from EUR 7.23 EPS reported last year. Excluding special items, this year for BBA consolidation effects and last year for pension reversal, we estimate EPS of EUR 6.00 versus EUR 4.95 a year ago. Despite a 20% plunge in automotive volume from the Ukraine crisis, chip crunch, and China COVID-19 lockdowns, consolidated revenue beat consensus by 1% and increased 22% to EUR 34.8 billion on a 19% increase in industrial revenue.

Because of the strength of its intangible assets, including brand and intellectual property, BMW has a narrow economic moat rating. Brand strength has enabled premium pricing across all of BMW's products, while intellectual property supports the brand image with strong product execution, especially in powertrains.

Narrow-moat BMW reported first-quarter earnings per share before special items (EPS) of EUR 5.51, well ahead of the EUR 4.40 FactSet consensus EPS estimate by EUR 1.11 and up EUR 1.25 from EUR 4.26 EPS reported last year. The quarter included the consolidation of the BMW Brilliance Auto with the company’s increased stake to 75% from 50% as of Feb. 10, 2022. Despite a 6% drop in automotive volume from the Ukraine crisis, chip crunch, and China COVID-19 lockdowns, consolidated revenue increased 16% to EUR 31.1 billion on a 17% increase in industrial revenue. The company did not provide an organic revenue figure to exclude currency or BBA. The top-line result was 0.4% shy of the FactSet consensus.

Because of the strength of its intangible assets, including brand and intellectual property, BMW has a narrow economic moat rating. Brand strength has enabled premium pricing across all of BMW's products, while intellectual property supports the brand image with strong product execution, especially in powertrains.