Does BMW Still Offer Value After a 32% Share Price Surge?

• If you are wondering whether Bayerische Motoren Werke is still good value after its recent run, or if the upside has already been priced in, this overview can help you sanity check the stock against its fundamentals.
• The share price has climbed to around €96.46, with gains of 9.6% over the last week, 12.4% over the past month, and 31.8% over the last year, which suggests rising optimism and shifting risk perceptions.
• That optimism has been supported by ongoing investment in electric and hybrid models, as BMW expands its Neue Klasse EV platform and rolls out new battery powered vehicles across key markets. At the same time, investors have been watching management updates on cost efficiency and capital allocation, which feed directly into expectations for long term profitability and returns.
• Even after this rally, Bayerische Motoren Werke scores a solid 5/6 on our valuation checks. This suggests the market may still be undervaluing parts of the story. Next, we will break down what different valuation methods indicate, then finish with a more holistic way to judge whether the shares are cheap or fairly priced.

Bayerische Motoren Werke delivered 31.8% returns over the last year. See how this stacks up to the rest of the Auto industry.

Approach 1: Bayerische Motoren Werke Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a business is worth by projecting its future cash flows and discounting them back to today in € terms. For Bayerische Motoren Werke, the model used is a 2 Stage Free Cash Flow to Equity approach.

The latest twelve month Free Cash Flow stands at about €646.3 Million, which analysts expect to rise significantly over the coming years. By 2029, Free Cash Flow is projected to reach roughly €7.0 Billion, with a path of increasing cash flows between 2026 and 2035 based on both analyst estimates and Simply Wall St extrapolations.

When all these projected cash flows are discounted back, the model produces an estimated intrinsic value of around €134.20 per share. Compared with the current share price of roughly €96.46, the DCF implies the stock is trading at about a 28.1% discount, which indicates potential undervaluation if the cash flow assumptions are realised.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Bayerische Motoren Werke is undervalued by 28.1%. Track this in your watchlist or portfolio, or discover 906 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Bayerische Motoren Werke.

Approach 2: Bayerische Motoren Werke Price vs Earnings

For profitable companies like Bayerische Motoren Werke, the Price to Earnings (PE) ratio is a practical way to gauge value because it links what investors pay today to the profits the business is already generating. In general, faster growth and lower perceived risk justify a higher PE, while slower growth or higher uncertainty should be reflected in a lower, more conservative multiple.

BMW currently trades on a PE of about 8.46x, which is well below both the Auto industry average of roughly 18.56x and the broader peer group average of around 19.53x. On the surface, that gap suggests the market is applying a sizeable discount to BMW relative to its sector and competitors.

Simply Wall St’s Fair Ratio framework goes a step further by estimating what PE multiple would be reasonable for BMW given its earnings growth outlook, profit margins, industry position, market cap and risk profile. For BMW, this Fair Ratio is around 12.21x, indicating the shares deserve a higher multiple than the current 8.46x. Because the Fair Ratio accounts for company specific fundamentals rather than simple peer comparisons, it provides a more tailored view of value and points to the stock being attractively priced on earnings.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Bayerische Motoren Werke Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple way to connect your view of Bayerische Motoren Werke’s future with the numbers behind it.

A Narrative is your story about a company, expressed through assumptions about its future revenue, earnings, margins and ultimately what you believe is a fair value, so you are not just copying market or analyst views but making them your own.

On Simply Wall St’s Community page, Narratives make this process accessible by linking BMW’s business story to a financial forecast and then to a fair value estimate, helping you compare that Fair Value to the current market price.

Because Narratives on the platform update dynamically as new information, like earnings releases or major EV announcements, comes in, your valuation can evolve automatically with the story rather than staying frozen in an outdated model.

For example, one BMW Narrative on Simply Wall St might project strong EV adoption, higher margins and a fair value near €135 per share, while another, more cautious view focused on China competition and regulatory risks might anchor fair value closer to €88.50.

For Bayerische Motoren Werke however we'll make it really easy for you with previews of two leading Bayerische Motoren Werke Narratives:

🐂 Bayerische Motoren Werke Bull Case

Fair value: €135.07

Implied undervaluation: approximately 28.6%

Revenue growth assumption: 5%

• Expects BMW’s EV transition, led by the Neue Klasse platform and expanding i-series lineup, to drive steady 5 to 7% annual revenue growth and higher margins.
• Sees rising contribution from premium models, software, and digital services lifting net profit margins toward 8 to 10% and justifying a re rating of the P/E multiple to 8 to 10x.
• Views the current low P/E and strong brand, combined with resilient luxury demand and supportive EV regulation, as creating undervaluation despite risks from competition, macro conditions, and regulation.

🐻 Bayerische Motoren Werke Bear Case

Fair value: €88.59

Implied overvaluation: approximately 8.9%

Revenue growth assumption: 3.38%

• Assumes more modest revenue growth and margin expansion, with earnings rising but largely matching today’s share price, implying BMW is close to fairly valued around the analyst consensus target.
• Highlights structural pressures in China, potential tariff and regulatory headwinds, and intense EV competition in Europe as ongoing threats to market share and profitability.
• Warns that strategic caution on autonomous driving and subsidy driven EV markets could undermine long term growth resilience, justifying only a mid single digit profit margin and limited valuation upside.

Do you think there's more to the story for Bayerische Motoren Werke? Head over to our Community to see what others are saying!

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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