BMW Stock: Barclays Upgrade Propels Shares Higher

BMW shares surged over 3% on Thursday, leading the DAX index following a significant upgrade from Barclays. The British investment bank raised its price target for the Munich-based automaker from €73.50 to €82.50, upgrading the stock from "Underweight" to "Equal Weight." This unexpected shift came despite BMW recently reporting a 13% decrease in second-quarter vehicle sales compared to the previous year. Analyst optimism centers on improved margin development and cash flow expectations, with particular emphasis on potential benefits from a resolution to the ongoing trade dispute between the United States and European Union, which could positively impact margin forecasts for the second half of the year.

Cash Flow Outlook Strengthens Investor Confidence

Management's statements regarding free cash flow generation have particularly resonated with market analysts. The company has not only reaffirmed its overall annual targets but also indicated stronger cash flow development compared to the previous quarter. BMW continues to maintain its targeted automotive margin of 5-7% for both the second quarter and full year, despite persistent uncertainties related to tariffs and challenging market conditions in China. The automaker's disciplined approach to investment management, inventory control, and cost-reduction measures appears to be bolstering its ability to maintain profitability during uncertain times, contributing to investor confidence ahead of the July 31 quarterly results announcement.

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Source StockWorld