BMW Slashes Profit Forecast Amid Chinese Market Pressure
BMW AG has revised its financial outlook, citing pressures in the Chinese market and delayed tariff relief. Despite this, the company maintains its dividend policy, with a payout of 30% to 40% of attributable earnings. Share prices reacted negatively, dropping by around 3% after trading.
BMW now anticipates an EBIT margin in the automotive segment of 5% to 6%, a reduction from its previous corridor. This revision has been met with a profit warning for 2025, where earnings per share are expected to drop by about 10%, and the average dividend is forecast at €4.05. Looking ahead to 2026, BMW anticipates a further decline in profit per share, with an EBIT margin in the auto segment of 5% to 5.5%. However, the company expects stabilization as restructuring measures in China are completed and investments in new electric vehicles begin to pay off.
Analysts remain optimistic despite the reduced earnings figures. JPMorgan maintains an 'Overweight' rating, while Jefferies sticks to a 'Buy' recommendation. BMW's share buyback program also remains unaffected. However, the company must now financially support its dealers in China on a large scale, a development that has raised concerns.
BMW AG's forecast for the expected free cash flow in the automotive segment has been halved to over 2.5 billion €. The return on capital employed (RoCE) is now expected to be lower than previously assumed, at 8% to 10%. Despite these revisions, BMW AG continues to adhere to its dividend policy, with the dividend set at 30% to 40% of the result attributable to shareholders.
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