BMW Stock Drops Amid Forecast Cuts and Trade Tensions
BMW shares plummeted by 7% as the luxury automaker slashed its 2025 earnings forecast, citing challenges with U.S. and German customs refunds and declining sales in China. The company anticipates a slight decrease in pretax earnings this year, adjusting its previous forecast of stable growth. Additionally, BMW has halved its free cash flow expectations.
Luxury car manufacturer BMW saw its shares take a hit, dropping by as much as 7% following an announcement that it has lowered its earnings forecast for 2025. This revision comes amid ongoing delays in customs refunds from the U.S. and Germany and persistent sales weakness in China, all against a backdrop of trade tensions.
The German auto giant disclosed that it anticipates a slight decline in pretax earnings for the current year, a shift from its earlier projection of a flat outcome compared to 2024. RBC analysts expressed disappointment over the tariff developments, despite BMW's strong positioning compared to its competitors, as the company is a leading auto exporter from Germany.
BMW has adjusted its free cash flow expectations for its automotive division, bringing it down to over 2.5 billion euros and narrowing its profit margin forecast to 5-6%. While hoping for a zero tariff deal between the EU and the U.S., it foresees significant customs refunds only materializing next year. Analysts suggest that BMW's key challenge lies in stabilizing its market presence and pricing strategy in China, a crucial element for sustaining long-term growth.
(With inputs from agencies.)
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