BMW (BMWG.DE): 2Q26 preview: China drags but resilient US/Europe holds the Auto margin in the 1-3% guide; share buyback accelerates

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BMW (BMWG.DE): 2Q26 preview: China drags but resilient US/Europe holds the Auto margin in the 1-3% guide; share buyback accelerates

Goldman Sachs BMW (BMWG.DE)

lower earnings and by a working-capital drag from inventory build-up amid iX3 and

i3 launches, though depreciation and investment provide some cushion. The net

result should still be positive free cash flow, but likely below the 1Q level. For FY26,

we expect BMW to generate €3.1bn Auto FCF, well above the guidance floor of

€2.5bn (VA cons €3.0bn). On capital return, the headline is that the share buyback

has been accelerated by around five months versus the original plan (3rd tranch of

the 3rd program in the amount of 625mn started on July 1 to be completed by Nov

30 instead of April 2027), which is a reassuring signal of balance-sheet confidence

despite the earnings reset in our view.

n 2H26 carries risk from potential further China dealer support and the absense

of Mexico/US tariff relief, though not impacting FY guide. Finally, on the various

puts and takes: in China, a dealer support payment (in the low-triple-digit millions of

Euros) is expected at the end of the 2Q, and while no further support is planned for

the 2H, management is willing to consider it if needed without affecting full-year

guidance. The IEEPA benefit, also in the low-triple-digit millions, will be booked in 2Q

and roughly washes against the China dealer support. On trade, the anticipated

reduction in the Mexico-to-US tariff from 27.5% did not materialise, but this does

not materially change guidance, according to management.

Exhibit 1: BMW estimate changes, new vs. old

2026E 2027E 2028E 2029E 2026-29E

€ mn New Old New vs. Old New Old New vs. Old New Old New vs. Old New Old New vs. Old New Old New vs. Old

Revenues