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AC Milan Fans: Buy BMW?

The stock is currently undervalued.

Ruth Saldanha 14 July, 2021 | 4:28AM
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Andrew Willis: AC Milan is a soccer team based in, well, Milan.

Valerio Baselli: I am an AC Milan fan, and this year, we are going to win the Champions League.

Willis: Well, you're clearly invested in this, and I hope AC Milan wins. But do you think you could invest in the team another way? Maybe you could buy BMW one of their main sponsors. If you did, would you be a champion?

Carmaker BMW's brand strength has enabled premium pricing across all its products, while intellectual property supports the brand image. It is trading at around $81, below our fair value estimate of $131. It has a narrow economic moat.

Richard Hilgert: We think that the market has undervalued BMW as though its economic moat has become permanently impaired. So, the 4-Star rated shares of BMW currently trade at a 31% discount to our €131 fair value estimate.

Willis: If you invest in AC Milan via BMW when it's so undervalued, your portfolio could be a champion.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Bayerische Motoren Werke AG35,750.00 HUF0.00

About Author

Ruth Saldanha

Ruth Saldanha  is Senior Editor at Morningstar.ca. Follow her on Twitter @KarishmaRuth.


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