|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's range||82.50 - 85.17|
|52-week range||45.30 - 90.68|
|Beta (5Y monthly)||1.34|
|PE ratio (TTM)||14.60|
|Earnings date||03 Aug 2021|
|Forward dividend & yield||1.90 (2.27%)|
|Ex-dividend date||13 May 2021|
|1y target est||94.10|
(Bloomberg) -- Cars are back in vogue courtesy of the pandemic. They’re also getting more expensive, thanks in part to surging commodity prices.Many of the essential ingredients for automakers, such as copper, steel and aluminum, are hitting or approaching record highs this year as the lagging supply can’t keep up with stimulus-driven demand. The Bloomberg Commodity Spot Index jumped to its highest since 2011, with metals up 21% so far this year.Should the current rally morph into a supercycle, rising car prices could forebode inflation across the board. Analysts at JPMorgan Chase & Co. estimate the price of an auto’s raw materials have climbed 83% in the year through March. Those pieces typically make up about 10% of the cost of building a vehicle, meaning the price tag for a $40,000 car would have to increase 8.3% to offset the rally, analysts for the bank wrote.“We’re definitely feeling the commodity headwind,” Jim Farley, chief executive officer of Ford Motor Co., said last week. “We’re seeing inflation in a variety of parts of our industry, kind of in ways we haven’t seen for many years.”Carmakers usually struggle to pass on higher costs, but demand is booming as major economies reopen and many consumers continue avoiding public transportation. The global semiconductor shortage also is inhibiting production, keeping inventory tight and driving up vehicle prices.In the U.S., car supply is so limited that rental companies are resorting to buying used vehicles at auction rather than new ones.The main contributor to higher commodity costs hitting the industry is the steel needed for chassis, engines and wheels. The metal’s recent rally has smashed records as China -- by far the biggest producer -- took measures to curb output.The boom in copper prices adds to the costs of electric vehicles just as the industry implements an energy transformation to meet tighter emissions standards. EVs use nearly 3 1/2 times more copper than gas guzzlers because of the larger amount of wiring inside, according to consultancy Wood Mackenzie Ltd.The increases may hurt automakers like Tesla Inc. and Volkswagen AG that are trying to make EVs more price-competitive with traditional cars.They also may encourage automakers to explore alternative chemistries for their EV batteries. The majority of cells use some combination of lithium, cobalt and nickel, which have jumped a minimum of 47% each in the past 12 months.Ford and BMW AG were among those investing $130 million this month in battery startup Solid Power Inc., which is working on cells that would remove the need for those metals, leading to a 10-fold decline in power pack costs.“They are looking to spread that risk,” said Caspar Rawles, head of price and data assessments at Benchmark Mineral Intelligence. “There is no hedging for lithium or cobalt.”BMW expects headwinds from rising commodity prices of as much as 1 billion euros ($1.2 billion) for the year, Chief Financial Officer Nicolas Peter said Friday during an earnings briefing. The luxury-car maker singled out rhodium, steel and palladium as particular worries in the coming months.Longer term, BMW is working to be less exposed to price squeezes in key raw materials. From 2025, the automaker plans to produce vehicles on a new architecture that will allow recycling of materials such as steel, aluminum and plastics to make new cars.“We’re seeking partnerships” to refine the necessary technologies, BMW CEO Oliver Zipse said.Jeep maker Stellantis NV -- formed from the merger of Fiat Chrysler and PSA Group –- said it needed to recover some of its higher costs, and the marketplace is supportive, so far.“It’s hard to imagine a better environment with which to pass through the impact of supply shock and price inflation to consumers who are effectively lining up to take delivery of their new car off the car carrier,” analysts at Morgan Stanley wrote in a note. “It’s a seller’s market in autos.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- BMW AG expects the global semiconductors shortage hobbling automotive production to be resolved in a couple of years as companies and governments work to overcome the shortfall.“There’s intense focus on the issue globally, so it’s to be expected for supply and demand to be back in balance within two years at the latest,” Chief Executive Officer Oliver Zipse said in an interview Thursday at the company’s driving academy near Munich.A lack of chips used in everything from navigation systems to certain rear-view mirrors has forced carmakers to curtail production just as demand picks up again in major economies that are easing pandemic restrictions. While Ford Motor Co. last month estimated the scarcity of semiconductors will slash earnings by $2.5 billion this year, BMW has only reported limited stoppages at two European plants.Zipse’s optimistic view contrasts with some of his carmaking peers. Renault SA CEO Luca De Meo said Thursday the chip crisis has exposed the “frightening” fragility of complex supply lines where entire industries depend on highly specialized manufacturers. Strategies that might have been valid two decades ago should be revisited, he said.Volkswagen AG has also cautioned that the semiconductor shortage will become more pronounced in the second quarter, though it still raised its full-year earnings outlook this week. BMW sent a similarly upbeat message on Friday, saying it expects automotive returns to reach the upper end of its 6% to 8% forecast. Strong demand spreading from China to the U.S. and Europe is helping offset higher prices for raw materials such as copper.“We cannot expect to remain completely unscathed by the chip shortage during the second quarter,” Zipse said. “But the extent won’t mean a significant impact on our earnings.”BMW rose as much as 2.1% in Frankfurt, extending gains this year to 18%. The carmaker said additional costs of as much as 1 billion euros ($1.2 billion) from rising commodity prices will be partially tempered by foreign-exchange gains, reducing the net impact to about 500 million euros. Higher rhodium, palladium and steel prices are particularly concerning, BMW said.Investment BoomThe chip shortages that arose after consumers snapped up electronic gadgets en masse while confined to their homes have spurred broad efforts to boost production. The European Commission plans to double the bloc’s output to at least 20% of world supply by 2030, a move that would reduce its reliance on foreign companies.U.S. President Joe Biden has vowed to better secure America’s supply chain by reviving domestic chip manufacturing. Taiwan Semiconductor Manufacturing Co. will spend as much as $28 billion on new plants and equipment this year.While waiting for investment programs to gather pace, manufacturers have had little choice but to idle plants or take the unusual step of stripping certain high-tech features from select models.Zipse said BMW has no plans to seek new partnerships or joint ventures, despite current restraints.“For critical components, we’ll stick with long-term supply contracts and a range of different partners,” he said. This will include battery cells critical to accelerating BMW’s rollout of EVs, he said. “From our point of view, we’ve covered the necessary supplies with long-term contracts.”(Updates with CEO comment in sixth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- BMW AG expects returns for its automotive business to be resilient this year even as surging commodity prices pose a risk to earnings.Profitability for its main carmaking operations probably will come in at the upper end of the 6% to 8% range BMW had forecast for the year, the Munich-based company said Friday. While automotive margin rose to 9.8% in the first quarter, the manufacturer warned rising raw material prices could have a dampening effect going forward.“We continue to streamline our processes and structures in order to boost performance,” Chief Financial Officer Nicolas Peter said.After registering a sales record led by China during the first quarter, BMW is feeling the strain from stretched supply chains as the global economy picks up speed. Everything from chips to copper to lithium are more difficult or expensive to procure, and carmakers have few short-term remedies aside from raising sticker prices for consumers. The semiconductor shortage is expected to drag into next year with weeks-long outages at some plants.BMW had escaped the chip issues largely unscathed until last week, when it was forced to reduce shifts at two plants in England and Germany. Volkswagen AG and Jeep maker Stellantis NV this week warned the shortage will worsen from the first three months of the year, while Ford Motor Co. has forecast a $2.5 billion hit to earnings.Higher sales of the lucrative X5 and X6 SUV models helped boost BMW’s returns in the first quarter. The carmaker released preliminary earnings last month that exceeded expectations as a demand recovery spread from China to the U.S. and Europe. Earnings before interest and taxes from auto operations rose to 2.24 billion euros ($2.7 billion) in the first three months, up from 229 million euros a year earlier.Vehicle sales during the first quarter surged more than a third to almost 637,000 cars as deliveries in China almost doubled.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.