Stocks of BMW plummet, negatively impacting other automotive companies
In a significant development for the automotive industry, BMW has announced a lowering of its expectations for passenger car deliveries and free cash flow this year, following issues with braking systems from supplier Continental.
The stock ticker for BMW is BMW AG (WKN: 519003) on the stock market. The news has sent BMW's stock plummeting over 8 percent on the day. Other major automakers, including Daimler Truck, Volkswagen, Porsche, and Mercedes, have also seen their stocks significantly drop. Continental's stock has dropped by 7 percent as well.
According to BMW and Continental, the affected vehicles can still be driven safely. However, the issues could lead to recalls and delivery stops for approximately 1.5 million vehicles. The costs for the warranty measures for the recalls could reach a high three-digit million euro range in the third quarter.
The pre-tax result for BMW could be worse than previously expected, but analysts have not provided specific comments in this article. Berenberg, however, has reaffirmed its "Hold" recommendation for BMW with a price target of 90 euros.
Berenberg is the only updated assessment from analysts at this time. It's worth noting that there are no specific search results addressing the impact of Continental's brake system supply issues on BMW's stock performance or analyst investment recommendations.
The development is a significant setback for BMW's automotive business. BMW now expects an operating margin before interest and taxes of between 6 and 7 percent, down from previous expectations of 8 to 10 percent. According to Bloomberg, BMW is examining compensation claims against Continental.
This incident underscores the potential impact of supply problems with major suppliers like Continental on automakers' production schedules and market confidence, potentially leading to stock price pressures and cautious analyst outlooks. However, precise impacts on BMW's stock and analyst advice would require current financial market data and expert analyses not provided here.
As the situation unfolds, it is expected that more updates will be provided by both BMW and the relevant analysts.
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