BMW (BMW.DE) drops 8% after 2026 EBIT margin cut to 1-3%

8% was the market reaction attached to BMW (BMW.DE) after the German automaker cut its 2026 guidance. A Reuters-syndicated report on MarketScreener said BMW shares fell in early Frankfurt trading after the company issued a profit warning late Tuesday, and the company’s own June 16 release gives the operating numbers behind the move.

The key reset is the automotive EBIT margin. BMW now guides to a 1-3% corridor for 2026, down from the previous 4-6% range. Automotive return on capital employed is now expected at 1-5%, down from 6-10%, while group profit before tax is expected to show a significant decrease from the prior year instead of the earlier moderate-decrease view.

Metric | New 2026 guidance | Prior guidance
Automotive EBIT margin | 1-3% | 4-6%
Automotive ROCE | 1-5% | 6-10%
Deliveries | Slight decrease | Previous-year level
Automotive free cash flow | Above €2.5B | Not changed in release

BMW tied the downgrade to two named pressures: worsening China demand, especially for non-electric vehicles, and broader costs and sentiment damage from the Middle East conflict. The company said positive volume trends in Europe and the U.S. cannot offset the China and Asia-Pacific decline, which makes the warning relevant for suppliers, premium-auto peers and investors tracking China exposure across European cyclicals.

The release also points to a second-half one-time earnings hit from accelerated structural and efficiency measures. BMW kept its 30-40% dividend payout ratio and ongoing buyback program unchanged, so the next check is whether the July 30 half-year report quantifies the Q2 profit and free-cash-flow decline and whether management changes the 2027 model-rollout cost cadence.

Not investment advice. Verify all figures with primary sources before acting.