Muted 1Q16 EBIT results are EUR 1.76bn/9.4% for the Automotive segment and EUR 2.46bn/11.8% for the group. In 2016E-18E, we expect EPS to grow at a CAGR of 3.1% and reach EUR 10.63 in FY18E. Our YE16 target price of EUR 93 implies a 26% upside potential for BMW shares.
Category Archives: BMW
Global Automotive Demand Atlas November 2015 edition
In October, global light vehicle sales increased 5.1% yoy to 7.62m, after 2.9% in September, resulting in a 1.5% increase to 73.26m YTD. LMC Automotive (LMCA) calculate that underlying demand continued to strengthen in October, with a SAAR (seasonally adjusted annualised rate) of 92.4m units/year, up 4.0% from 88.8m in September, resulting in a YTD SAAR of 88.2m, up less than 1% from FY14’s 87.4m. The recovery of the October SAAR to levels last seen in December (92.1m) and January (89.4m), is due to a strong recovery in China, supported by continuing strong performances in the US and Western Europe.
BMW (EUR 92) BUY – 3Q15A results & FY15E-17E preview
BUY: Based on historic P/E valuation, we calculate a target price of EUR 112 for YE16E. This implies a 21% upside potential from the current share price. The chart technical outlook is positive and the next levels of minor resistance around EUR 93 and EUR 96 should not prevent BMW shares to test their 200-day moving average around EUR 98. (See pp.16-17.)
BMW 3Q15E preview
BUY: Based on historic P/E valuation, we calculate a target price of EUR 110 for YE16E. This implies a 19% upside potential from the current share price. The chart technical outlook is positive and the next levels of minor resistance around EUR 93 and EUR 96 should not prevent BMW shares to test their 200-day moving average around EUR 98. (See pp.15-16.)
June 2015 Global Automotive Demand Atlas
In May, global light vehicle sales declined 1.4% yoy to 7.33m, after a 1.6% increase in April, resulting in a 1.1% increase to 36.79m YTD. LMC Automotive (LMCA) calculate that in May the SAAR (seasonally adjusted annualized rate) was 87.0m, units/year, down from 88.4m in April and well below January’s 89.4m, and 88.0m YTD.
The global LV sales that have been stable so far during 2015 are considerably weaker than a surprisingly strong December SAAR of 92.1m/year, confirming the suspicion that the latter was due to year-end marketing pushes in key markets.
For FY15E, we expect a global LV market of 89.0m, implying an increase by 1.7% or 1.5m. This is a downgrade from the previous forecast of 89.2m and an implied increase by 1.9% or 1.7m. The growth rate is thus expected to more than halve in 2015E, from 3.7% in FY14 and 4.0% in FY13.
BMW (EUR 102) – BUY
Solid 1Q15 auto results reflect ‘normalisation’ in China to single-digit growth rates and profit margins. In 2015E-17E, we expect EPS to grow at a CAGR of 8.1% and reach EUR 11.15 in FY17E. Our new YE15 target price of EUR 125 implies a 22% upside potential for BMW shares.
Morning Market Commentary & Weekly Charts
If the current slow GDP trend continues, and all signs we see point to this, then the level of earnings for the S&P 500 could be the lowest seen in two years. Q1. We are convinced by the initial data that this year’s Q2 will not be nearly as strong; we maintain our 2015 forecast for +2.2% GDP growth. It is time to make a few portfolio adjustments.
011415 – CGI Global Automotive Demand Atlas
01 14 2015 CGI – GADA – January 2015 edition
Automotive Analyst Sabine Blumel reviews global automotive demand by country.
112414 – CGI November Global Automotive Demand Atlas
11 24 2014 CGI – GADA – November edition
Senior Automotive Analyst Sabine Blumel analyzes Global Automotive Demand.
080114 – CGI Global Automotive Demand Atlas August/September
09 01 2014 CGI – GADA – August-September edition
Automotive Analyst Sabine Blumel analyzes global automotive demand trends.
053014 – CGI Global Automotive Demand Atlas, May
05 30 2014 CGI – GADA – May 2014 edition
Analyst Sabine Blumel reviews Global Automotive Demand by major market globally. SAAR revised down slightly due to the worsening outlook in a number of emerging markets,the FY14E forecast is a 3.5% increase to some 87.3m; this implies a deceleration from last year’s restated +3.9% growth to 84.36m.
050714 – BMW 1Q14 Results Commentary – BUY
05 06 2014 CGI – BMW – 1Q14A results comment
1Q14A group results in line with 1Q14E. Strong result at Automotive segment, despite front-loaded costs. We keep FY14E estimates virtually unchanged and confirm those for 2015E-16E. Our 2016E EPS is EUR 10.34 and our YE14 target price of EUR 110.00 implies a 25% upside potential for BMW shares.
The short term technical outlook for BMW shares is neutral/negative. The risks of BMW shares not holding support at that level are high, and we expect for BMW shares to test the next support level at the 200-day moving average at EUR 82. The long term positive outlook for BMW shares remains positive.
0505 2014 -BMW (EUR 89.10) – BUY 2014E-16E outlook – EPS growth at CAGR of 8.5%
BMW (EUR 89.10) – BUY
2014E-16E outlook – EPS growth at CAGR of 8.5%
Our 2016E EPS is EUR 10.34; our YE14 target price of EUR 110.00 implies a 24% upside potential for BMW shares
05052015 – BMW 1Q 2014 Results Preview
05 05 2014 CGI – BMW – 1Q14E preview
Automotive Analyst Sabine Blumel presents 1Q 2014 Results preview.
Our 1Q14E EBIT estimates are EUR 1.67bn/9.7% for the Automotive segment and EUR 2.10bn/11.2% for the group.
Our 2016E EPS is EUR 10.34 and our YE14 target price of EUR 110.00 implies a 24% upside potential for BMW shares.
1Q14E group: we expect that a 6.9% yoy increase in revenue to EUR 18.76bn generated yoy increases of 3.0% in EBIT to EUR 2.10bn/11.2% and 5.0% in net profit to EUR 1.37bn. We thus expect that BMW management will confirm their bullish guidance for FY14 of a ‘significant increase in its group’s pre-tax profit’, driven by ‘a significant increase in sales’.
At the dominant Automotive segment, we expect that in 1Q14E a reported a 8.7% increase in retail sales to 487.0k units (that include 108.0k sales in China, 62.5k of which were sold by a JV) generated a 9.3% increase in PBT to EUR 1.66bn/9.6%. We expect that a reported 4.8% yoy increase in fully consolidated retail sales to 424.5k units (incl. 45.5k cars imported to China) generated increases of 8.0% in revenue to EUR 17.18bn and of 5.3% in EBIT to EUR 1.67bn/9.7%, from a strong EUR 1.58bn/9.9% in 1Q13. We see the expected EUR 1.27bn yoy EBIT increase driven by positives such as volume and a better mix; expected headwinds include launch costs, costs related to Strategy Number one and forex. (See pp.5-7)
Morning Market Commentary – DAX, German surplus
We are expecting for the DAX 30 equities’ outperformance to extend through 2015. EPS expectations should stabilize alongside global GDP growth. We are forecasting DAX EPS FY 2014 to rise by 16% yoy to 760. (Vs. consensus 729).
In the past 30 years that we have been active in the global equities capital markets arena, Germany has been focusing like no other nation and its corporate sector in re-inventing and restructuring and repositioning itself and its economy by constantly upgrading through technological, intellectual value-added, and by high capital expenditure driven innovative research and development. This has lead to the point that the majority of German companies to-date are world class leaders, second to none.
BMW 1Q13E preview & FY13E and Valuation
BMW (EUR 70.25) – BUY – Target price (YE 2013E): EUR 86.99; potential +24%
A valuation in line with the 10-year average historic valuation of 10.2x implies a share price of EUR 88.05 at year-end 2014E and time-discounted (yield of 10-year Bund), a target price of EUR 86.99 at year-end 2013E, which is 23.8% above the current share price (EUR 70.25) and in line with our previous target price of EUR 87.24 (March 18th). (See our latest company reports ‘BMW – 1Q13E preview’ of April 30th.)
Global Automotive Demand Atlas – April edition
In March, the global light vehicle markets declined 1.5% yoy to 7.96m units, after having declined 6.2% yoy in February, resulting in a 1.6% yoy increase in YTD, according to LMC Automotive. The SAAR (seasonally adjusted annualised rate) of sales was 81.26m units/year, 2.0% higher than February’s 79.68m and 5.4% down from a record 85.91m in January. YTD, the SAAR was 82.83m, 2.3% higher than FY12’s 81.00m. In FY13E, the global LVs markets are expected to grow 2.8% to 83.2m, which implies a considerable deceleration from last year’s 5.3% and is in line with our previous forecast. (See GADA March 2013 edition of April 1st, 2013.) From 2014 onwards, the markets are expected to accelerate again and to grow by almost 7% p.a. in 2014E and 2015E.
BMW (EUR 70.00)-BUY
A valuation in line with the 10-year average historic valuation of 10.3x implies a share price of EUR 88.52 at year-end 2014E and time-discounted (yield of 10-year Bund), a target price of EUR 87.24 at year-end 2013E, which is 24.6% above the current share price (EUR 70.00) and 2.7% below our previous target price of EUR 89.69 (March 12th). (See our latest company reports ‘BMW – 4Q/FY12A prel. results comment’ of March 18th and ‘BMW – 4Q/FY12E preview’ of March 12th.)
BMW: 4Q/FY12 Preliminary Results Comment & Model
BMW shares – our view: The current BMW share price of EUR 70.00 values BMW at 8.7x 2013E prospective earnings and at 8.1x prospective 2014E earnings; the latter is a 21% discount to the 10-year average historic valuation of 10.3x. This is inconsistent with the implication that our 2014E EPS estimates (EUR 8.63) are 11% above FY12’s record EUR 7.77 and 100% higher than the 10-yr average (EUR 4.31). (See pp.11-12.) Continue reading
BMW: 4Q/FY12E Preview
BMW shares – our view: The current BMW share price of EUR 72.65 values BMW shares at 9.0x 2013E prospective earnings and at 8.4x prospective 2014E earnings; the latter is a 20% discount to the 10-year average historic valuation of 10.5x. This is inconsistent with the implication that our 2014E EPS estimates of EUR 8.63 are 16% above 2011’s record EUR 7.45, 74% higher than the 5-year average of EUR 4.97 and 123% higher than the 10-year average of EUR 3.87. (See pp. 21-22.)
Global Automotive Demand Atlas – February edition
In January, the global light vehicle markets grew 12.0% yoy, after having advanced 1.3% yoy in December and 5.2% to 80.89m in FY12, according to LMC Automotive. The SAAR (seasonally adjusted annualised rate) of sales hit a record level of 85.91m units/year in January, 4.4% higher than December’s 82.31m. In FY13E, the global LVs markets are expected to decelerate sharply and grow just 2.7% to 83.0m, in line with our previous forecast. (See GADA January 2013 edition of January 23rd, 2013.)
Global Markets Strategy & Equities Outlook – Bullish on Japan & China
As you know we turned very bullish on Japan and China in September 2012, and have been advising to overweight allocations towards the Nikkei and the Shanghai Indices, as we recognized major turning points in those markets due to changes in government leadership and implicitly new and improved stimulus policies going into effect as of Q4 2012.
Global Automotive Demand Atlas January 2013 edition
In December, the global light vehicle markets grew 1.3% yoy, after having advanced 4.3% in November, resulting in a 5.2% increase to 80.89m in FY12, according to LMC Automotive. The SAAR (seasonally adjusted annualised rate) of sales declined somewhat to 82.31m units/year in December, from 83.03m units/year in November, though was better than in October and September. In 2013E, the global LVs markets are expected to decelerate sharply and grow just 2.3% to 82.73m, in line with our previous forecast. (See GADA December 2012 edition of December 19th, 2012.) Continue reading
Global Automotive Valuations – September 2012 Edition
– Europe, US, Japan, Korea & India OEMs Valuations
– Global Truck Manufactures Valuations
Morning Market Commentary -Technical Market Observations
Technical Market Observations & Babbage
The weakest 3-week period of the year for North American equity markets is from September 16th to October 9th. The S&P 500 has dropped an average of 2.5% during this period. The TSE Composite Index has dropped an average of 4.0% per period. The weakness is related to negative guidance (earnings confession season) and analyst estimate reductions/downgrades during this period prior to release of third quarter results.
2012 so far:……
Global Automotive Demand Atlas – September 2012 edition
- US LV Sales
- Western Europe Car Market – Germany, France, Italy, Spain, UK
- Japan pc market
- China LV market
- Brazil pc market
- Russia LV market
- Demand trend for trucks – US, Europe, Japan
BMW zooming off in the fast lane!
Management under CEO Reithofer have taken a highly pro-active business approach and introduced a modular production & development strategy for future products, are accelerating the model momentum and efficiently hedging currency. This has put BMW in a position to better take advantage of external factors such as a strong global recovery in demand and pricing of premium cars, and increased volatility in the currency markets.
BMW 1Q10E preview and tables
Our view: Following a sharp 32% increase from a 2010-low of EUR 28.75 (on February 15th) the BMW share price hit a two-year high of almost EUR 38 on April 26th. The current BMW share price of EUR 36.69 values BMW shares at 11.8x 2011E earnings, which is at a 21% premium to the 5-year average pre-crisis historic valuation of 9.8x. This is inconsistent with the implication that our 2011E EPS (EUR 3.11) are 35% below 2007’s EUR 4.78 and 17% below the pre-crisis 5-year average of EUR 3.74. (See pp.10-11 for details.)
BMW Valuation
Even a valuation in line with the 5-year average pre-crisis historic valuation of 9.8x implies a share price of EUR 30.36 at year-end 2011E and time-discounted (yield of 10-year Bund), a target price of EUR 29.46 at year-end 2010E, which is 19.7% below the current share price and 10% above the previous target price of EUR 26.77. See our latest company report on BMW of April 29th.
BMW 4Q/FY09E preview and tables
FY09E earnings at EUR 151m/EUR 0.24 per share. We expect that in FY09E, an already announced 4.7% decline in group revenue to EUR 50.68bn resulted in declines of 26% in pre-tax profit to EUR 259m/0.5% and of 53% in net profit to EUR 151m/0.3% or EUR 0.24 per share. We estimate that this was the result of an EBIT of EUR 393m/0.8% and a net financial charge of EUR -134m. (See pp.2, 4-6 for details.)
BMW 4Q/FY09 preliminary results
The current BMW share price of EUR 32.19 is 11% down from its 2009 peak of EUR 36.14 (October 23rd) and up 12% from a 2010-low of EUR 28.75 (on February 15th). This values BMW shares at 11.4x 2011E earnings, which is at a 17% premium to the 5-year average pre-crisis historic valuation of 9.8x. This is inconsistent with the implication that our 2011E EPS (EUR 2.85) are 40.5% below 2007’s EUR 4.78 and 23.9% below the pre-crisis 5-year average of EUR 3.74.
BMW FY09 & Management Update
Management expect a positive pre-tax result for 2009. Decline in group revenue led by the Auto division. We confirm our FY10E- FY11E estimates: recovery in sales and earnings.
BMW set for sales recovery, after 10.4% decline in FY09
We confirm our FY09E estimates of a group EBIT of EUR 393m/0.8% and earnings of EUR 0.24 per share. The Auto division is set to exit a dismal 2009 with a strong EUR 140m/1.1% in 4Q09E, leading to a negative EBIT of EUR -218m in FY09E. Higher sales, a further ramp-up in production and improving model momentum should drive the EUR 216m qoq earnings improvement in 4Q09E.
BMW praying for a weaker euro
BMW group remains at the mercy of currency, the US dollar in particular.
BMW 3Q09E preview & results table, comment and guidance
BMW – 3Q09 comment. Auto division incurred deeper 3Q09 EBIT loss as de- stocking continued. Underlying FCF remained positive. Financial Services: financial risk marginally receded in 3Q09. Management confirmed its FY09 guidance of a group profit and a sales decline by 10-15%.
BMW 2Q/1H09E preview & results table and guidance
Our view: 2010E outlook: BMW should remain unaffected from a post-incentive hang- over in 2010 and be able to benefit from any recovery in demand globally and the US specifically. We expect that this, together with an improving model momentum (introduction of the 5-Series in 2Q10E) should lead to an EBIT of EUR 1.2bn/2.9%. However, as the dependence on FS is expected to continue to grow, BMW is becoming potentially more vulnerable to any future shocks to the global financial system.
Western Europe passenger car market– July 2009 update
Car market is set for an extended V-shaped recession. Our baseline scenario of an 11.7% correction to 11.68m in 2010 is based on the assumption that the schemes in Italy and France will be extended into part of 2010, the German scheme will expire at year-end as planned, and that car manufacturers will continue to aggressively discount.
BMW 4Q08E preview & results table and guidance
Group headline results worse than expected: BMW incurred a EUR 1.2bn pre-tax loss in 4Q08 and reported a EUR 351m profit (0.7% margin) in FY08.