(News Bulletin 247) – Oddo maintains its ‘neutral’ rating on the BMW share, with a price target raised from 90 to 95 euros.
While the manufacturer had already presented its preliminary results on March 9, the issue of yesterday’s publication focused mainly on the 2023 outlook.
The group still displays a confident attitude, guiding on an Automotive operating margin that is globally stable, even growing in 2023 (range of 8 to 10% vs 7 to 9% guided in 2022).
‘While the group should benefit from solid product momentum in 2023 and the cautious guidance on volumes seems to show a desire to remain disciplined on prices, we remain slightly below the middle of the guidance range (8.7 %e for Auto), which nevertheless implies an upward revision of our EBIT estimate by 3%, placing us 7% above the VA’ consensus, indicates Oddo.
The analyst believes that the confidence displayed by BMW is “encouraging” but that it is not likely to completely remove all concerns about the margin environment for manufacturers in 2023.
Nevertheless, ‘we estimate that the downside risk is also quite limited given the financial performance, the valuation (FCF Yield >10%) but also the generous policy of return of value to the shareholder (dividend + probable extension of the share buyback program)’, concludes the analysis office.
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