According to one analyst, one of the best plays on the electric vehicle (EV) market could be through an international automotive leader. BMW (OTCMKTS:BMWYY) isn’t always the first name that comes to mind when either investors or consumers discuss EV stocks. But the German luxury vehicle producer has made excellent headway into the EV market, and it has no plans to slow down. Now, a leading Wall Street firm believes BMWYY stock is in an excellent position to ride the EV wave to new heights as market conditions shift in its favor. While the industry has been fairly volatile, the company has taken important steps to position itself as an EV producer with ample room to run.
It’s true that BMWYY stock has been struggling lately. But its recent declines could be the ideal opportunity for investors to acquire it on the dip before it rises again. Analyst Philippe Houchois of Jefferies sees it as having an upside potential of 41% if these positive trends continue.
What’s Happening With BMWYY Stock
After a difficult week, BMYWW stock is finally trending upward. As of this writing, it is up 0.89% and looks primed to continue rising. It’s been a mixed day for European automakers so far. While BMW’s rival Mercedes Benz Group (OTCMKTS:MBGYY) is up by the same amount, fellow German automaker Volkswagen (OTCMKTS:VWAGY) has failed to garner any momentum so far. Despite the volatility it faced earlier today, it’s clear that the market is reacting well to Wall Street’s new bullish take on BMWYY.
The positive sentiment toward the company may seem odd. Luxury EV sales have been slumping lately, and BMW is known for producing trendy but highly-priced vehicles. At a time when the market seems better for lower-cost EV producers, BMWYY stock likely doesn’t come to mind for most investors. But there’s no denying that BMW has made significant progress on the EV front recently. During just the past quarter, it delivered 93,931 EVs, outpacing industry leaders such as Ford (NYSE:F) and General Motors (NYSE:GM). As Barron’s reports:
“Some traditional auto makers have larger EV businesses, but few can match BMW’s sales mix. The larger [Volkswagen] for instance, sold 210,000 BEVs during the third quarter, but that amounted to 9% of total sales. BEVs made up 15% of BMW’s total third-quarter sales, up from less than 9% the year before, a number that doesn’t include its hybrid sales. That puts the company in an enviable position.”
It’s also worth noting that the EVs BMW is turning out to look pretty similar to the cars that their drivers already love. The company’s lineup features electric models of i4, i5, and i7 BMW sedans and the larger iX SUV. Like General Motors, it is taking popular vehicles and electrifying them, giving drivers appealing options that look and feel familiar.
Jefferies on BMW
With these positive aspects in mind, it’s easy to see why Jefferies is bullish on BMW. Houchois maintains a “buy” rating for BMWYY stock and a price target of $116 per share. “BMW has both kept powertrain options open and been methodical about developing EVs,” he states.
Additionally, BMW also gave investors another potential growth catalyst last week. The company announced that starting in 2025, it will begin building EVs with the North American Charging Standard (NACS), which will enable drivers to power them with Tesla‘s (NASDAQ:TSLA) Supercharger network. This will provide another incentive for consumers to make the switch to driving electric, particularly if they already trust the BMW brand.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
