BMW is navigating one of its most challenging periods in years, with a toxic mix of falling sales in China, a profit warning, a credit rating outlook downgrade, and a deceleration in its share buyback programme. The stock, which closed at €60.98 on Tuesday, now sits just 2% above its 52-week low of €58.80, having shed 36% of its value since the start of the year. Technical indicators underline the strain: the shares trade 27% below their 200-day moving average, while the relative strength index (RSI) of 23.6 points to deeply oversold conditions.
Moody’s last week took the axe to the company’s outlook, shifting it from stable to negative while affirming the A2 long-term rating. The agency’s move came after BMW slashed its 2026 EBIT margin target for the automotive segment to between 1% and 3%, replacing a previous forecast of 4% to 6%. The outlook for free cash flow in the auto business was also cut sharply, from more than €4.5 billion to just over €2.5 billion. Moody’s now doubts whether the Munich-based manufacturer can restore margins quickly enough amid persistent headwinds.
Cost pressures are feeding through to the workforce. BMW is planning for a headcount reduction of between 1% and nearly 5% in 2026, equating to roughly 7,500 positions out of a global total of 154,540. A binding collective agreement on job security prevents compulsory layoffs, so the cuts are expected to come through early retirement, phased retirement schemes, and natural attrition. According to Manager Magazin, CEO Milan Nedeljković – who took the helm in mid-May – has set aside nearly €1 billion to fund voluntary separation packages and early-retirement deals.
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At the root of the slump is China, where deliveries plunged 22% in May versus the prior year and 20% in the first five months. The combustion-engine market, still a key profit pool for German automakers, crashed nearly 40% in May alone. Chinese buyers are increasingly turning to cheaper electric vehicles from BYD, Nio, and Xiaomi, putting further pressure on BMW’s EV ambitions. The group is pinning its hopes on the Neue Klasse architecture; the iX3, unveiled at the IAA in September 2025, has been well received, accounting for roughly one in three new battery-electric BMW orders in Europe. The factory in Debrecen, Hungary, is already running two shifts. Orders for the new i3 opened on 18 June, far ahead of schedule. The First Edition, priced at €75,340, boasts up to 906 kilometres of range and charging speeds of 400 kW.
In a move that has raised eyebrows, BMW has throttled back its share repurchases at a time when the stock is severely depressed. In mid-June, the company bought just 130,000 ordinary shares, worth around €8 million on Xetra – a dramatic drop from the nearly €75 million spent in the two preceding weeks combined. The broader buyback programme, which runs until April 2027 and has a total envelope of up to €2 billion, remains intact. So far, some €1.1 billion has been deployed, cancelling roughly 14 million shares. The current tranche, capped at €625 million, is scheduled to run until late summer. Despite the programme, the slowed pace offers scant support to the share price while operating earnings remain under siege.
Analysts are divided on the stock’s trajectory. Goldman Sachs views the sell-off after the profit warning as overdone, noting that BMW’s net industrial cash position now exceeds its market capitalisation. UBS, however, cut its price target from €88 to €70 and kept a “Neutral” rating. The next major catalyst will be the half-year report due on 30 July 2026, when investors will see if early i3 orders can offset deepening China weakness and geopolitical strains.
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