SG Downgrades BMW To Sell
SG Securities cuts BMW (BMW.XE) to sell from hold as "cautious expectations" on '06 could halt a recent share price recovery. Negative forex effects and increased development costs could postpone an expected return to an 8% pretax margin. BMW remains very solid, with high profits and cash flow. Still, it seems less attractive short-term than DaimlerChrysler (DCX), Volkswagen (VOW.XE), or Renault (13190.FR), which are less profitable but offer significant leverage. A share buyback program offers chief support for the shares, and '06 guidance will be key. Sees fair value at EUR35. Shares trade -1.9% at EUR39.88. (JEL)