BMW Shares Catch a Tailwind From Mercedes as Investors Brace for Half-Year Results
Published on 07/29/2026 at 02:42 | Redaktion boerse-global.de
BMW’s stock jumped more than 4 percent on Tuesday, climbing to €59.98 as a surprisingly well-received earnings report from crosstown rival Mercedes-Benz lifted the entire German auto sector. The advance offered a moment of relief for shareholders who have watched the shares shed more than a third of their value this year, but the real test arrives on Thursday when BMW publishes its own half-year figures.
Mercedes posted a 22 percent increase in operating profit to €1.5 billion for the second quarter, even as revenue slipped 3.3 percent to €32.1 billion. While the result fell just short of the analyst consensus of €1.6 billion, investors focused instead on the cost-cutting measures that drove the earnings improvement. Mercedes shares surged as much as 5 percent, and the positive sentiment spilled over to BMW, which has yet to release any numbers of its own.
The rally comes against a grim backdrop. BMW issued its second profit warning in less than a month on July 17, slashing its forecast for automotive EBIT margin to a range of 1 to 3 percent, down from the previous 4 to 6 percent. The company blamed the persistent weakness in China’s auto market, along with costs tied to technical recalls. That warning followed an earlier guidance cut in June, and the cumulative effect has been brutal: the stock touched a 52-week low of €56.40 on July 24, leaving it down roughly 36.7 percent from the start of the year. Even after Tuesday’s bounce, the shares remain about 36 percent in the red year-to-date.
China remains the most acute pressure point. BMW’s first-half delivery figures, released in early July, showed global sales falling 4.2 percent to 1,156,742 vehicles. Europe managed a 5.4 percent gain and the Americas added 3 percent, but China cratered with a 20.4 percent plunge. The China Passenger Car Association has repeatedly downgraded its full-year market forecast, and the competitive environment in the region shows no sign of easing. BMW has warned that positive volume trends in Europe and the US cannot offset the Chinese drag, and the company plans to accelerate structural and efficiency measures in the second half — moves that will weigh on earnings before they deliver any benefit.
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Compounding the operational challenges, BMW confirmed last week a global recall of 744,234 vehicles across the 3 Series, 5 Series, 7 Series, X5 and i3 model lines due to potentially defective starter relays that pose a fire risk. In Germany alone, roughly 42,300 cars are affected, according to the ADAC.
Analyst opinion is divided on whether the shares have hit bottom. HSBC upgraded BMW from “Hold” to “Buy” with a €71 price target, arguing that the China risks and margin weakness are now priced in after the steep selloff. Deutsche Bank maintained its “Buy” rating and €90 target, though it cautioned about the weak second-quarter sales figures. The two targets imply upside of roughly 19 percent and 50 percent respectively from Tuesday’s closing level. Bernstein Research, meanwhile, cut its price target from €108 to €85 at the end of June while keeping an “Outperform” rating.
On the corporate front, BMW’s supervisory board appointed Dorothea von Boxberg as a new board member effective September 1. The company’s share buyback program for 2025/2027 continues as well, with 634,883 common shares repurchased between July 20 and July 26. Those buybacks now focus exclusively on common stock following the completion of a conversion of all preferred shares into common shares at the end of June, which ended separate trading in the preference shares.
BMW at a turning point? This analysis reveals what investors need to know now.
Thursday’s half-year report will show whether the cost discipline that investors rewarded at Mercedes is also taking hold at BMW. If the Munich-based automaker can deliver a similar narrative of margin protection through efficiency gains, the stock may find firmer footing after months of decline. If not, the risks that triggered two profit warnings in four weeks will remain squarely in focus.
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