Automotive giant Volkswagen AG (ETR: VOW3) is widely recognised for its production of a diverse range of passenger cars, commercial vehicles, motorcycles, and related mobility services, encompassing numerous well-known brands.
Its extensive portfolio includes marques such as Volkswagen, Audi, Skoda, Seat, Lamborghini, Bentley, and Ducati, among others. For investors evaluating the automotive sector, Volkswagen AG is definitely a stock to consider.
Volkswagen Share Price & Chart
After rising to above EUR 250 per share in 2021, the stock has been trending lower ever since. However, this year (as of July 25) it seems to have found a base. It currently trades around the EUR 100.35 mark, down around 3% in the last 12 months.
P/E Ratio Average (End of 2024): 4.15
Dividend Yield: 6.4%
Volkswagen EPS and Revenue Breakdown 2020-2024
Volkswagen AG is a German multinational automotive corporation headquartered in Wolfsburg, Lower Saxony. Established in 1937, it stands as one of the world’s largest automotive manufacturers by sales and revenue.
Porsche SE holds a 53.3% stake in Volkswagen Group. Volkswagen AG’s primary listing is on the Frankfurt Stock Exchange (Xetra). It is a component of the DAX index.
Volkswagen AG Stock Forecast
Data compiled by TradingView indicates that of the 25 analysts covering the stock, 14 have a “Buy” rating, while 11 have a “Hold” rating.
A View From the Bulls:
In April, Morgan Stanley upgraded Volkswagen AG from Underweight to Equalweight with a new price target of EUR 94, up from EUR 86. The bank told investors in a note that while there are still numerous challenges for the company, there are also “opportunities to create shareholder value by reducing the cost structure and, in particular, becoming more asset-light.”
The bank explained that this would involve further reductions in installed capacity and headcount, particularly in high-cost countries. “VW made a first step in December, and we see today’s geopolitical backdrop as an opportunity to move further in that direction,” wrote Morgan Stanley.
Meanwhile, the general bull case for Volkswagen shares centres around its scale and diversified brand portfolio, its strategic move into electric vehicles, its established manufacturing capabilities and global distribution network, and the potential for attractive dividend payouts.
A View From the Bears: In a recent note to clients, analysts at RBC Capital highlighted bearish factors, including US tariff concerns and weakening market dynamics in China. “Tariffs pose significant risks, particularly for premium brands like Audi and Porsche, which lack U.S. manufacturing facilities, prompting Volkswagen to explore localization options, including the upcoming Scout brand facility in South Carolina,” explained RBC.
Ratings agency Fitch revised Volkswagen AG’s outlook to Negative from Stable, citing “worsening market conditions in the US and increasing cost pressures driven by tariffs imposed on the automotive sector.”
Fitch expects VW’s EBIT margins to fall 100bp-150bp, to around 5%, and free cash flow (FCF) margins to remain negative over the next 12 months. “Although we expect medium-term recovery as restructuring charges subside and new model launches ramp up, we see limited rating headroom for execution risk and additional economic stress from our revised expectations for much of Europe,” Fitxh stated.
Average Analyst Consensus 12-Month Price Target: EUR 112.65
Our View: Volkswagen AG has a leading position in the automotive industry, but there are clear headwinds that it is going to have to overcome in the medium term. Investors should closely monitor the effectiveness of the company’s strategy and ability to navigate the current market and geopolitical environment.
Who Should Buy Volkswagen AG Shares
When assessing an investment in Volkswagen AG, several investor profiles might find it a suitable addition to their portfolios:
Long-term investors: The company’s commitment to electrification offers a potential opportunity for those who believe in the industry’s shift.
Diversified exposure across vehicle segments: With its extensive portfolio spanning from mass-market cars to ultra-luxury brands and commercial vehicles, Volkswagen provides broad market coverage.
Value-oriented investors: The stock’s current valuation metrics and potential for attractive dividend payouts may appeal to those seeking value within a leading global manufacturer.
Strong production capabilities and market presence: Volkswagen AG’s vast manufacturing footprint and well-established distribution networks underpin its resilience and reach.
