Bayerische Motoren Werke (XTRA:BMW) Is Down 6.5% After Lowering 2025 Earnings Forecast on China Slowdown

• Earlier this week, Bayerische Motoren Werke AG revised its 2025 earnings forecast downward, attributing the update to slow growth in China and the impact of increased U.S. import tariffs, while confirming continued strong sales in Europe and the Americas.
• This adjustment in guidance comes as the company narrows its return on capital outlook for the automotive business and signals increasing sensitivity to shifting global trade and demand patterns, particularly in its largest export markets.
• We'll now examine how BMW's lowered earnings outlook due to slower China growth could influence its broader investment narrative.

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Bayerische Motoren Werke Investment Narrative Recap

To own BMW shares, you need to believe that premium global auto demand and strong product innovation can balance out China’s ongoing slowdown and persistent tariff headwinds. The company’s downward earnings revision highlights that uncertainty around China sales growth is now the most pressing short term catalyst, while intensifying pricing and policy pressure in China remains the biggest risk; these risks are significant, but the guidance update appears broadly in line with previously flagged challenges.

BMW’s recent announcement of a narrowed return on capital outlook for its automotive operations is particularly relevant after the latest earnings update, as it directly reflects the impact of China’s slower growth and higher US import tariffs on profitability. This shift reinforces that near-term performance will be most sensitive to both the recovery pace in China and ongoing margin compression risks in key export markets.

Yet, even as earnings guidance is adjusted, investors must stay alert to emerging structural changes in China’s premium car segment, where competitive pressures and market share shifts continue to...

Read the full narrative on Bayerische Motoren Werke (it's free!)

Bayerische Motoren Werke's outlook anticipates €150.8 billion in revenue and €8.3 billion in earnings by 2028. This scenario is based on analysts assuming a 3.4% annual revenue growth rate and a €2.6 billion increase in earnings from the current €5.7 billion level.

Uncover how Bayerische Motoren Werke's forecasts yield a €88.59 fair value, a 10% upside to its current price.

Exploring Other Perspectives

Nine community members from Simply Wall St set BMW’s fair value estimates from €60 to €135.07, spanning a wide spectrum. Many highlight the risks in China’s market and how these could weigh on long-term earnings, consider exploring several viewpoints before forming your outlook.

Explore 9 other fair value estimates on Bayerische Motoren Werke - why the stock might be worth 25% less than the current price!

Build Your Own Bayerische Motoren Werke Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Bayerische Motoren Werke research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.
• Our free Bayerische Motoren Werke research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Bayerische Motoren Werke's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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