RBC Sees Room for BMW's Q3 Margins to Beat FY26 Guidance on Aumovio Settlement

07:54 AM EDT, 10/15/2026 (MT Newswires) -- RBC Capital Markets sees potential for BMW Group's (BMW.F) third-quarter automotive margins to surpass its full-year 2026 outlook, citing a legal settlement with supplier Aumovio (AMV0.F). "A ~EUR350M IBS brake system settlement could lift Q3 automotive margins above the 1-3% guidance corridor, though Q4 faces ~125bps of headwind from the voluntary redundancy program (vs prior expectation of ~100bps headwind in H2). Combined with a more cautious outlook on China, we revise our '26 EBITDA modestly higher. China remains the key overhang, though BMW's Q3 retail sales compare favorably against peers. We lower our PT to EUR58 from EUR60, reflecting a more cautious outlook on China for '27," analysts said Wednesday, noting they expect BMW to recover the restructuring costs within two years. Ahead of the third-quarter results due on Nov. 4, analysts forecast that the German carmaker's free cash flow conversion will be "soft" due to working capital headwinds, while the company's 625 million-euro share repurchase program is assumed to remain on course to finish by the end of November. RBC has a sector perform rating on the stock.