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Bavarian Motor Works AG (ETR: BMW) shares have advanced over 15% since early October 2022, with the current share price at €83.
European automakers continue to face challenges, but despite this, BMW reported strong third-quarter results last month.
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BMW continues to focus on accelerating the adoption of electric vehicles
Bayerische Motoren Werke AG is a famous German automobile manufacturer known for its automobile brands such as BMW and Mini, as well as the ultra-luxury Rolls-Royce.
The company reported strong third-quarter results last month; Total revenue grew 35.3% Y/Y to €37.18 billion, while GAAP earnings per share were €4.25.
BMW continues to focus on the adoption of electric vehicles, and sales momentum is strong due to demand for the BMW iX, and the BMW i4 continues to grow.
By September 2022, BMW had delivered 128,000 electric vehicles to customers, more than double the figure for the same period in 2021.
Despite supply disruptions and high inflammationThe number of deliveries is forecast to increase significantly in the fourth quarter of 2022 compared to the third quarter of 2022.
Another positive piece of information is that the company’s management expects pre-tax earnings to be significantly higher in fiscal 2022 compared to fiscal 2021.
At the same time, many European automakers continue to face challenges, and according to the European Automobile Manufacturers Association (ACEA), October EU commercial vehicle registrations fell -8.9% for the sixteenth consecutive month of struggle.
Germany had the steepest decline in total commercial vehicle sales, down -12.4%, followed by France and Italy with smaller losses of -5.3% and -3.9%.
Supply chain issues and high raw material prices are still the main limiting factor for many companies, while the rise Energy The cost of the Russia-Ukraine war could be a long-term shock for many European countries. Goldman Sachs report:
We continue to expect growth to slow in the months from 2023 due to the impact of the energy crisis on the German economy.
With a market capitalization of €55 billion, BMW’s shares are not expensive, but investors should keep in mind that the global economy faces the risk of a recession that could hamper corporate earnings and stock markets.
BMW trades at less than three times TTM EBITDA, which is very attractive, but if Europe enters a recession, the stock price could be at a lower price level.
Technical analysis
BMW shares have been advancing over the past few weeks, and for now, the “bulls” are controlling the price movement.
The price has moved back above the 10-day moving average, which is definitely a positive sign; Still, if the European stock market enters a more significant correction phase, stock prices will remain at low levels.
Current support levels are €80 and €70; €90 and €100 represent current resistance levels. If the price rises above €90, it will be a signal to trade BMW shares, and the next target could be €100.
On the other hand, if the price falls below €80, it would be a “sell” signal, and the next target could be €75.
Summary
Shares of Bayerische Motoren Werke AG have been advancing over the past few weeks, and the company continues to focus on accelerating the adoption of electric vehicles. With a market capitalization of €55 billion, BMW’s shares are not expensive, but investors should keep in mind that the global economy faces the risk of a recession that could hamper corporate earnings and stock markets.
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