HSBC Upgrades BMW to Buy as Automaker Readies 7,500 Job Cuts and Slashed Margin Targets
Published on 07/18/2026 at 14:32 | Redaktion boerse-global.de
BMW shares are clinging to levels just above their 52-week low, caught between a rare analyst upgrade and a deep operational restructuring that underscores the gravity of the headwinds facing Germany’s premier automaker. At Friday’s close, the stock stood at €58.40, down 0.75% on the day and 37.41% lower since the start of the year — a decline of roughly 40% from the December 2025 peak of €97.90. With the relative strength index at 35.7, the shares are technically oversold but not yet in extreme territory, leaving room for either a bounce or further slide.
That valuation backdrop is what prompted HSBC to lift its rating on BMW from Hold to Buy on July 17, setting a price target of €71 — well above current trading levels. The broker’s logic turns on the profit warning BMW issued in mid-June, when it slashed its full-year margin guidance. HSBC argues that the lowered bar makes the company’s earnings outlook more realistic and reduces the risk of another negative surprise. “Exactly this downward adjustment has laid the groundwork for a more honest set of expectations,” the analysts wrote. In a market already punishing the stock for its China exposure and structural cost pressures, HSBC sees a buying opportunity in the gap between depressed sentiment and a stabilised forecast.
Yet even as HSBC turns bullish, BMW is preparing for deep cost cuts that signal management’s own acknowledgment of the strain. The company has tapped Dorothea von Boxberg, a former Brussels Airlines executive with a track record of cost-reduction programmes inside the Lufthansa group, to lead human resources. According to sources close to the company, she is set to eliminate up to 7,500 positions. A works council meeting is scheduled for late July in Munich, where workers will hear the details of the plan. The move comes after BMW slashed its profit-margin target to a range of 1% to 3%, down sharply from the earlier 4%–6% goal. In the first half of 2026, the automaker sold roughly 1.15 million vehicles, a 4.2% decline year-on-year.
Should investors sell immediately? Or is it worth buying BMW?
That sales drop places BMW in a broader industry slowdown. A study by the Center of Automotive Management found that 14 of 20 major manufacturers recorded falling volumes in the first half, with an average decline of 2.8%. Volkswagen lost 6.5%, Toyota 3.1%, and Hyundai 1.6%. BMW and Mercedes-Benz both fared better than the sector average, but that relative outperformance offers little solace when the core market — China — continues to deteriorate. Passenger-car sales in China tumbled 21% in the first half, while Chinese manufacturers’ exports surged 65.3%. HSBC has cut its 2026 China car-demand forecast to minus 5%, a headwind that no upgrade can neutralise.
The competitive environment is also shifting. Chinese rival BYD, despite suffering a 39% domestic sales plunge and a 15.7% global drop in the first half, is targeting BMW directly with models like the Denza Z9GT. Meanwhile Mercedes-Benz is investing €1 billion to double capacity at its plant in Kecskemét, Hungary, while BMW itself opened a factory in the Hungarian city of Debrecen in September 2025 — further evidence that German automakers are reordering their cost bases beyond home soil.
Not all of BMW’s businesses are struggling. Motorcycle registrations in Germany rose 20.9% in the first half to 68,768 units, with BMW leading the brand ranking, even if Honda took the monthly lead in June. That bright spot, however, does little to offset the broader weakness in the auto division. The state’s electric-vehicle subsidy programme, which paid out €53.9 million through end-June, lists Tesla as the top recipient with 2,086 cases; BMW does not appear among the leading brands, underscoring its challenges in the EV transition.
For investors, the next focal point is the July works council meeting, where von Boxberg is expected to outline the scope of the job cuts and how they might help restore margins. The combination of an outside analyst upgrade and an internal restructuring plan presents two contrasting narratives: one that sees the worst as priced in, and another that acknowledges the pain still to come. Which one prevails will depend on whether the cost savings can stabilise a business model under pressure from China, competition, and the transition to electric mobility.
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BMW Stock: New Analysis - 18 July
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