Risk Reward Update

Research evidence excerpt

Risk Reward Update

d with implied volatility data from the options market as of 20

Jul 2026. All figures are approximate risk-neutral probabilities of the stock reaching beyond the scenario price in either

three-months’ or one-years’ time. View explanation of Options Probabilities methodology here

BULL CASE €88.00 BASE CASE €74.00 BEAR CASE €52.00

~7.1x bull case FY27e EPS of ~€12.3 ~8.4x base case FY27e EPS of ~€8.8 ~8.4x bear case FY27e EPS of ~€6.2

Assumes that better sustained global We value BMW on ~8.4x estimated FY27 Assumes that weak global markets and high

growth pushes up unit sales and sustains EPS, below its long-term average of ~9x. We rates cause group unit sales to fall LSD%,

strong pricing, boosting revenues and taking believe FY27 EPS of ~€8.8, a significant whilst pricing pressure persists, especially in

the group adj. EBIT margin to ~7.4%. With reduction vs ~€18 in FY23, is much closer to the Chinese BEV segment, leading to a

consolidation in Chinese BEVs, BMW a sustainable level for the company. Whilst reduction in group revenues and BMW

maintains share without significant ASP price/mix normalisation will impact BMW group adj. EBIT margin falling back to just

reductions. In such a scenario, we think too, we think its margin stabilisation 4.3%. This pushes EPS back towards ~€6.2,

investors may extrapolate peak BMW EPS, mechanisms should reduce the downside levels not seen in recent years. We assume

and could pay a ~7.1x P/E multiple for this risk. The company has taken a leadership the market values the shares at a multiple

more resilient EPS profile vs peers. position with its BEV penetration rate, and of ~8.4x, in line with recent averages, on

may compete well within the Chinese BEV short-term concerns about demand, pricing

segment.