BMW Stock Analysis

BMW Aktienanalyse

BMW (WKN: 519000 / ISIN: DE00051900, Industry: Automotive, Country: Germany) Stock Analysis 11/19/20.

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Sector Analysis:

The German automotive industry was badly shaken by Dieselgate and recalls. As a result, the German automobile manufacturers have lost a lot of their value. Competitors like Tesla have also made life difficult for German car manufacturers. The technological lead of Tesla and Co. seems years away and as if that would not be enough, the Corona crisis has further affected German auto stocks. This leads to ratings that are low, as can be seen from the industry comparison. If the German car industry, which is now also heavily subsidized by the state, jumps on the bandwagon of new technologies, bargains could be found here:

BMW

P/B Ratio: 0.8

P/E Ratio: 9.46

 

Daimler

P/B Ratio: 0.9

P/E Ratio: 11

VW

P/B Ratio: 0.7

P/E Ratio: 6

Tesla

P/B Ratio: 47.74

P/E Ratio: 781


Compared to the German carmakers, it is clear how much Tesla is overrated. The market capitalization also shows the enthusiasm for Tesla and how German carmakers are left behind on the stock market.

Revenue BMW

104 billion euro

Revenue VW

253 billion Euro

Revenue Tesla

30 billion Euro


Market-Cap BMW

47 billion Euro

MARKET-CAP VW

80 billion Euro

MARKET-CAP Tesla

400 billion Euro


Although Tesla generates significantly less sales than the German automaker, the market capitalization (number of shares x share price) is significantly higher. Tesla's significantly higher growth rates are already factored in here. While German automakers can only grow 4% per year, Tesla is growing at 40% in sales per year. That is of course impressive, but if the German carmakers can catch up technologically, the growth figures will also be divided among the German carmakers.

BMW

P/B: 0.8

P/E: 9.46

Overall automotive industry

P/B: 2.39

P/E: 12.38


The entire automotive industry is undervalued relative to the other industries. An undervalued stock like BMW could be a bargain in this undervalued industry. If electric drives and H2 drives are developed in a marketable manner, BMW and the entire automotive industry will again strive for higher ratings.

Fair Value Analysis:

By calculating the fair price (fair value) of the share, it can be determined whether the share is currently cheap or expensive. We use several different approaches to calculate fair value. The following fair values show the value of BMW shares:

Fair Value Calculator

135 Euro

DCF Fair Value

115 Euro

Quality Fair Value

60 Euro


The fair value of BMW shares is around 100 euros each. The BMW share therefore has a higher fair value than the current market price of 70 euros. Like the rest of the German automotive industry, BMW is undervalued and will be able to catch up with new technologies in the next few years and take the wind out of the sails of competitors like Tesla.

Fair P/E & Quality:

The Fair Value Calculator Quality Check analyzes the soft quality factors of BMW shares. This includes the analysis of the management, the product and the market environment. With the Total Value Score Ranking you can check the BMW share for the financial key figures:

Fair P/E

Fair P/E: 14 (recent P/E: 9.46)

Total Value Score

4/10


Since BMW shows too weak growth figures, the total value score weakens. Of course, BMW also has to invest a lot of money in the development of the new technologies. This results in reduced profits and lower profitability. But here too, BMW can catch up in the future if the new technologies are fully developed. The fair P / E ratio is already higher and a further expression of the fact that BMW has been punished too severely in recent years.

Momentum & Relative Strength:

The company's relative strength is one of the most important alpha factors in stock research. Only stocks with high relative strength and momentum can beat the market. The relative strength describes with which factor the share performs in comparison to the overall market (if the share performance corresponds to the market performance, the relative strength would be 1).

Relative Strength 6 Months

BMW: 1.24

Industry: 1.23

Relative Strength 12 Months

BMW: 0.53

Industry: 0.57


The relative strength makes it clear that BMW cannot outperform the automotive industry. It just developed in the same way as the average of the other automotive stocks. However, what speaks for the entire industry is that it has clearly gained momentum in the last 6 months and that this industry is very likely to overperform in the next 3-6 months.

Conclusion:

The BMW share is currently undervalued and has room for up to 100 euros per share. The technological change in the automotive industry and the emissions scandal hit German automotive companies hard. This can also be seen in the long-term relative strength. For a few months, however, the industry has been able to detach itself from the overall market, which is also thanks to the state subsidy programs. The German automotive industry is now picking up speed and is making up ground compared to Tesla & Co.

Compared to other auto stocks, BMW is a bargain but not exactly a rocket either. The share development corresponds to that of the industry. A solid investment for those who believe that the German automotive industry can catch up.


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