, Columnist
BMW's Hazard Lights Are Blinking
Leasing assets are a potential hazard.
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Investors aren't giving BMW AG much credit for its consistently good profits and decent cash generation. Maybe too much credit is the problem.
BMW's automotive business generated an impressive 5.8 billion euros ($6.3 billion) of free cash flow last year, lifting net liquidity (cash, marketable securities and intragroup net financial assets) to 19.6 billion euros. Yet, oddly, BMW's liquidity buffer accounts for more than a third of its market value and the shares trade on just 8 times estimated earnings, barely half the multiple investors accord to large listed European companies in the Stoxx 600.