UBS: BMW's performance is expected to highlight the reduction of inventory in the quarter.

UBS analysts wrote that the main feature of BMW's fourth quarter may be destocking. The bank predicts that the pre-tax profit margin for the quarter in the automotive business will be 4.0%, with slightly positive free cash flow. For 2026, the bank currently expects BMW to forecast flat revenue, with a pre-tax profit margin for the automotive business of 4%-6%. "Previously, we believed that BMW was more likely to forecast a slight increase in revenue, with a pre-tax profit margin for the automotive business of 5%-7%." The bank added that, while fourth quarter sales and performance in China are in line with expectations, the overall market is showing signs of slowing down, and BMW management may be inclined to take a more conservative approach. The bank downgraded BMW's rating from buy to neutral, mainly due to the stock performance in 2025. The bank lowered its target price from 95 euros to 93 euros. The stock price fell by 2.3% to 88.44 euros.