Senate Republicans to challenge auto safety mandates in January - WSJ
Investing.com - Goldman Sachs initiated coverage on Volkswagen AG (OTC:VWAGY) with a Neutral rating and a price target of EUR106.00 on Monday. Trading at $11.08, Volkswagen shares have gained 23.76% year-to-date and 31.23% over the past year. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value assessment.
The investment bank cited external headwinds as a challenge for Volkswagen in the near term, despite visible restructuring progress at the German automaker. With a market capitalization of $55.51 billion and a P/E ratio of 7.16, Volkswagen trades at just 0.26 times book value, reflecting investor caution about these challenges.
Goldman Sachs expects Volkswagen’s Brand Group Core to benefit from cost-measure improvements, though these gains may be partially offset by battery electric vehicle (BEV) margin dilution and intensifying competition from Chinese automakers. The company’s gross profit margin stands at 14.77%, with revenue growth of just 0.49% in the last twelve months. InvestingPro offers additional insights on Volkswagen’s financial health, which currently rates as FAIR overall, with particularly strong scores in relative value.
For Brand Group Progressive, which includes Audi, the firm is constructive on Audi’s product offensive and cost-reduction programs that should help stabilize its business. Volkswagen currently offers a 4.1% dividend yield, providing income potential while investors await these operational improvements.
Goldman Sachs believes profitability at Brand Group Progressive will remain structurally weaker than competitors BMW and Mercedes, due to tariff exposure, BEV ramp costs, and challenges in executing software transitions at scale. Volkswagen is one of 1,400+ companies covered by comprehensive Pro Research Reports, available exclusively through InvestingPro, which transform complex data into actionable intelligence for smarter investing decisions.
In other recent news, Volkswagen reported a loss in its third-quarter earnings, with the company’s Chief Financial Officer, Arno Antlitz, estimating that U.S. tariffs will result in approximately $5.83 billion in costs this year. Despite these challenges, RBC Capital upgraded Volkswagen’s stock rating from Sector Perform to Outperform, citing the automaker’s strategic production positioning in Mexico as a buffer against U.S. tariffs. Additionally, Volkswagen announced plans to invest $1.2 billion in artificial intelligence by 2030, aiming to enhance vehicle development and industrial applications. This AI initiative is expected to result in significant cost savings by 2035. In terms of supply chain developments, Volkswagen has received its first chip deliveries from Nexperia after a disruption caused by U.S.-China trade tensions. The Dutch government had previously taken control of Nexperia, leading to an export block by China. These developments highlight Volkswagen’s ongoing efforts to navigate current economic and geopolitical challenges.
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