[Updated 09/22/2021] Volkswagen update
Volkswagen stock (OTCMKTS: VWAGY) has been in the current lineup since July 2021 without a small jump in mid-August. The stock has fallen over the past few days with the broader market and is currently priced close to $ 30. In comparison Trefis’ Volkswagen evaluation is $ 47. The company continues on the path of its electronic campaign, where it predicts that of the total sales volume, more than 70% will be all-electric vehicles in European countries and 50% in the Chinese and American markets. At the end of August, Volkswagen announced that its ID.3 model will be available from the fourth quarter in China – this is its third all-electric model in the past six months. The company also continues to focus on research and development of battery technology by opening a state-of-the-art laboratory center for battery cells in Salzgitter, Germany. The aim is to deploy the Volkswagen unified cell outside the Salzgitter production line from 2025. The company is investing around 70 million euros in the facilities.
All in all, we expect Volkswagen’s turnover increase by 10% to 245 billion euros (296.5 billion dollars). In addition, its net profit is expected to reach 12.8 billion euros ($ 15.4 billion), which will bring EPS to 2.54 € ($ 3.08) for 2021. For fiscal year 2022, we forecast a turnover of 254 billion euros (307.3 billion dollars) and a net profit to increase to 13.8 billion euros (16.7 billion dollars). This will bring EPS to € 2.75 ($ 3.33), which together with the P / E multiple of 14.1x and a euro / dollar exchange rate of $ 1.21 will lead to Volkswagen evaluation about $ 47, which implies an increase of over 40%.
[Updated 2021/04/12] Does Volkswagen’s stock have room to grow to $ 35?
At the current price of around $ 35 per share, we believe Volkswagen stock (OTCMKTS: VWAGY) has reached its short-term potential. VWAGY stock has risen 120% from $ 16 to $ 35 between late 2018 and now, compared to the S & P500 which has risen 66% during the same period. The company saw its stock price rise suddenly after its announcements in March to compete with Tesla
Volkswagen’s revenue increased from 235.8 billion euros ($ 268.8 billion) in 2018 to 222.9 billion euros ($ 271.2 billion) in 2020. The net profit margin rose from 5% in 2018 to 3.7% in 2020. Over the same period, per share, earnings fell from € 2.36 ($ 2.69) per share to € 1.66 (2, $ 02) per share.
During the same time period, the P / E multiple fell from 5.8x to around 10.3x. The P / E improved further in 2021 after its EV announcements and is currently around 18.4x.
Where is the stock headed?
The global spread of the coronavirus has resulted in lockdowns in various cities around the world, which has affected industrial and economic activity. This, in turn, has reduced consumer spending on big ticket items like automobiles. This was reflected in the sales volume which fell 16% to 9.16K units in 2020 from 10.96K units in 2019.
The actual recovery and its timing depend on the wider containment of the spread of the coronavirus. Our dashboard Trends in Covid-19 cases in the United States provides insight into the spread of the pandemic in the United States and contrasts with trends in Brazil and Russia. Following the stimulus from the Fed – which set a floor on fear – the market was willing to “watch” the current period of weakness and take a longer-term view. With investors focusing their attention on the 2021 results, valuations become important in finding value. Although market sentiment may be fickle, and evidence of a slight uptick in new cases could scare investors again. In 2021, we forecast VWAGY revenue to reach 245 billion euros ($ 296.5 billion), up 10% year-on-year. In addition, its net profit is expected to reach 12.8 billion euros ($ 15.5 billion), increasing its EPS to 2.54 €, which together with the P / E multiple of 12.2x and the rate of changes from $ 1.21 to €, will lead to a valuation of Volkswagen around $ 38 per share, or about 8% more than the current market price.
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