Quick Take: Aumovio and BMW reach settlement on brake system dispute

Research evidence excerpt

Quick Take: Aumovio and BMW reach settlement on brake system dispute

e competition from Chinese OEMs. This results in a price

target of €85.

RISKS

AUMOVIO SE

Upside risks to our price target include: 1) Aumovio cuts costs ahead of our expectations and can expand margins and hit the 8%

long-term target which will drive earnings ahead of consensus and a rerating vs peers. 2) Aumovio's debt free position means it

rerates from today's discount to peers Valeo and Forvia who have higher leverage.

Downside risks to our target price include: 1) The currently unresolved BMW braking issue could lead to a three-digit million

additional liability. 2) Aurora ADAS partnership is unsuccessful, meaning Aumovio won't be able to hit mid-term targets.

Bayerische Motoren Werke AG

Downside - 1) Trade disputes escalate between China and Europe following EU's decision to investigate subsidies being provided

to Chinese BEV makers 2) US tariffs are not significantly reduced from current levels 3) Battery metal costs remain high or surge

causing significant increases in costs that are difficult to pass through 4) Insufficient state support for BEV infrastructure - (grid

upgrading, charging) slows BEV adoption.

RATINGS DEFINITIONS, BENCHMARKS AND DISTRIBUTION

EQUITY RATINGS DEFINITIONS

Bernstein brand

The Bernstein brand rates stocks based on forecasts of relative performance for the next 12 months versus the S&P 500 for

stocks listed on the U.S. and Canadian exchanges, versus the Bloomberg Europe Developed Markets Large and Mid Cap Price

Return Index EUR (EDME) for stocks listed on the European exchanges and emerging markets exchanges outside of the Asia

Pacific region, versus the Bloomberg Japan Large and Mid Cap Price Return Index USD (JPL) for stocks listed on the Japanese