By Sam Boughedda
BMW (OTC:BMWYY) was named a short-term Buy idea by Deutsche Bank analysts on Tuesday.
The analysts, who have a €120 (€1 = $1.0768) price target on the stock, argue that BMW has sharpened its flexibility strategy with a stronger emphasis on BEVs.
"Moreover, the OEM has also demonstrated that BEV products are selling and are not more dilutive than others," wrote the analysts. "Helped by a strong model lineup with higher-end products, we see earnings staying solid, and investment needs consolidating with strong FCF generation as a result."
Deutsche Bank believes the free cash flow should continue being returned to shareholders in the form of dividends and buybacks and that further comments on a potential share buyback will be a catalyst for the stock.
They also state that with the Neue Klasse model "making BMW an innovation leader again," they have additional comfort with the view that BMW has a "good chance of becoming an investor darling."