BMW Shares: Analyst Upgrade Meets a Market Shifting Back to Combustion

Bernstein Research has thrown its weight behind BMW with an “Outperform” rating, but the automaker’s stock is struggling to catch a bid. Shares traded at €59.94 on Friday, down nearly 2% and hovering just above the 52-week low of €58.80. The year-to-date loss stands at roughly 37%, while the Relative Strength Index has tumbled to 22.5 — deep into oversold territory and well below the 24.5 reading flagged in mid-June. The distance to the 200-day moving average has stretched to 28%, suggesting much of the sector’s misery is already priced in.

The bullish stance from Bernstein comes at a time when BMW itself has dialed back expectations. In mid-June, the company cut its 2026 full-year guidance, now forecasting a slight decline in deliveries and an EBIT margin of just 1% to 3% in the automotive segment. That bleak outlook stands in contrast to the analyst’s conviction that Munich is better positioned than rivals. Bernstein points to BMW’s avoidance of overcapacity, its relentless focus on production efficiency — energy use per car at the Spartanburg plant has fallen 66% over roughly two decades — and progress on alternative powertrains. A new battery-cell generation cuts emissions per watt-hour by 28%, and roughly a third of each vehicle now consists of recycled materials.

Yet the broader market dynamic in Germany is shifting in a direction that may favor BMW’s multi-technology strategy. For the first time in a year, combustion-engine cars were cheaper than comparable electric vehicles in June, according to a study by the Center Automotive Research (CAR). Discounts on the 20 best-selling EVs have narrowed from 19.5% of list price in January to 17.8%; ICE cars are now offered at an average 18.4% discount, making them about €2,000 cheaper than comparable EVs — a gap that has widened from roughly €1,300 in December 2025. CAR director Ferdinand Dudenhöffer notes that state subsidies in the low-cost EV segment mainly benefit importers from China, Korea and Europe, while German premium manufacturers like BMW gain little from them. A swing back toward combustion engines therefore plays directly into BMW’s hands.

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Political winds are also shifting in Munich’s favor. Germany’s transport ministry is pushing for more flexible emissions rules rather than rigid quotas, which suits BMW’s commitment to a multi-drivetrain approach. Meanwhile, global regulatory pressure is rising: the UNECE is tightening rules on autonomous driving, and US lawmakers are debating new tracking laws that have some manufacturers threatening to halt sales. Competitors are feeling the heat — BYD has lost more than half its market value, Polestar was barred from the US market for new vehicles from model year 2027 under the Connected Vehicle Rule, and Tesla plans to ramp production at Grünheide to 7,500 vehicles a week from October.

All eyes now turn to July 30, when BMW will publish its half-year report. The numbers will provide the first concrete evidence of whether the company can operationally withstand the sector downtrend and whether the recent guidance cut was conservative enough. For now, the stock remains in deeply oversold territory, with the 52-week low offering a speculative floor — but the recovery depends on execution catching up with analyst conviction.

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