(CercleFinance.com) – The title rose by nearly 1% after the release of two positive analyzes on the value.
RBC on Tuesday maintained its ‘sector performance’ opinion and its price target of 107 euros on BMW, while saying that it was perhaps time to be ‘more constructive’ on the stock.
In a research note, the Canadian broker points out that the share price of the German car group has only recovered by 106% since the lows reached during the pandemic, where the title Mercedes-Benz has recovered. by 231%.
A performance gap that the broker justifies by the split by Mercedes of its truck and heavy-duty business, but also by a differential in terms of margins.
As Mercedes generates a profit margin of 15.7% in its automotive division itself, that of BMW reaches only 8.9%, argues RBC in its note.
The intermediary points out, however, that by harmonizing the accounting practices of the two groups, particularly with regard to the treatment of activities in China, BMW’s margin would rather be at a level close to 13.2%.
RBC also adds that it appreciates BMW’s plans for the redistribution of capital, with an upcoming share buyback program that could reach more than five billion euros and the payment of a possible extraordinary dividend linked to the consolidation of the Chinese joint venture BMW Brilliance Automotive.
Berenberg started BMW’s follow today with a buy recommendation and a price target of 110 euros, representing a potential upside of 40%.
In a dedicated automotive research note, the broker argues that the premium automaker is perhaps the ‘least understood’ stock in the industry despite its ‘undervalued’ flexibility.
‘Concerns about a rise in investments ignore the increased attention that the group pays to the premium segment and its dynamics in electric vehicles’, estimates the broker.
“The resistance of its results and its cash can perfectly allow to remunerate the shareholders while intensifying the investments in the electricity”, he assures.
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