Deutsche Bank reduces Volkswagen's share price target and leaves many surprised
Deutsche Bank has adjusted its price target for Volkswagen stock, reflecting increased caution about the automaker's near-term performance and profitability. Despite this move, the bank maintains a "buy" recommendation for the German carmaker, indicating confidence in its long-term value and potential upside.
The revised price target stands at €125, a decrease of 23 percent from the previous target. This decision comes in response to Volkswagen softening its business outlook, but analysts at Deutsche Bank believe that the automaker's fundamentals, such as its delivery milestones on electric vehicles and strong market position, will support growth beyond the short-term uncertainties.
Meanwhile, Jefferies analysts also recommend buying Volkswagen's preferred shares, with their own price target set at 140 euros. However, the third quarter has been marked by several profit warnings from the automotive industry, leaving little room for major surprises.
The Chinese company BYD is aggressively expanding in Germany, posing a potential threat to Volkswagen's position in the market. This expansion could impact Volkswagen's turnaround, which remains uncertain due to competition and potential plant closures.
Many hopes for Volkswagen's recovery rest on upcoming car models and new innovations. If the turnaround is successful, an entry into the auto stock would be favourable.
It's important to note that the stock performance of Volkswagen over one year, three years, and five years is negative. Despite this, the bank's continued "buy" recommendation suggests that they believe in Volkswagen's potential for recovery and growth.
Volkswagen's WKN is 766403, while BYD's WKN is A0M4W9.
[1] Source: Reuters [2] Source: CNBC
The revised price target for Volkswagen stock, as set by Deutsche Bank, is €125, a decrease of 23 percent from the previous target. This adjustment, alongside profit warnings from the automotive industry, makes it crucial for potential investors to closely watch the finance sector's predictions for transportation companies, including those in the automotive industry.
