With Volkswagen, luxury at a discount price – Actions

The leading car maker is in good health and has great ambitions in the electric sector. The IPO of his subsidiary Porsche was a success, despite the ambient gloom. The stock deserves a higher value.

Contrary to what its stock market performance suggests, with a fall of 29% for preferred shares, against -24% for the DAX (German Stock Exchange barometer) and -27.5% for the Euro Stoxx Automobiles & Parts, the leading manufacturer of cars in Europe has. not really lost on the road. The brand portfolio of the group based in Wolfsburg, Germany, is the strongest in the world and covers all budgets, with 300 models sold under the brands Volkswagen, Audi, Seat, Skoda, Porsche, Lamborghini, Bentley (passenger cars) or Scania, MAN and Navistar (trucks). But Volkswagen is known for its luxury brands, which guarantee the group’s profitability. However, this segment is less sensitive to a…

Contrary to what its stock market performance suggests, with a fall of 29% for preferred shares, against -24% for the DAX (German Stock Exchange barometer) and -27.5% for the Euro Stoxx Automobiles & Parts, the leading manufacturer of cars in Europe has. not really lost on the road. The brand portfolio of the group based in Wolfsburg, Germany, is the strongest in the world and covers all budgets, with 300 models sold under the brands Volkswagen, Audi, Seat, Skoda, Porsche, Lamborghini, Bentley (passenger cars) or Scania, MAN and Navistar (trucks). But Volkswagen is known for its luxury brands, which guarantee the group’s profitability. However, this segment is less sensitive to a recession, while the lower segments suffer from a decrease in purchasing power. This explains the IPO, in the middle of a crisis, of subsidiary Porsche. So far, it’s been a success. Volkswagen intends to take the title of the leading producer and seller of electric vehicles from Tesla Motors, and will probably do so in 2025. In the third quarter of 2022, the share of electric vehicles in its sales of passenger cars (themselves increased by 25 % year on year) is admittedly only 6%, but this is almost 50% more than the 4.2% of the same quarter of 2021, and the figure is at the high end of forecast range (from 5 to 6%). Another very important element, the average selling price of an electric vehicle still exceeds a thermal vehicle by several tens of percentage points. Thus, the goals set for electric vehicles (20% in 2025, 25% in 2026 and 50% in 2030) will boost turnover. year, 221,000 Porsche vehicles were sold, an increase of 6% year-on-year; the turnover of the brand jumped by 16.5%, from 20.98 to 24.46 billion euros. The iconic luxury brand represents about 3.5% of the number of cars sold by the group, but 15% of the turnover and almost 28% of the operating profit (Ebit), or 4.75 of the 17.1 billion euros. Since the start of its listing, the share of Porsche has increased by 19%: the market capitalization flirts with 90 billion euros, which has already exceeded the Volkswagen group by almost 20%. Continued problems in the supply chain (lack of parts, chips, etc.) and the war in Ukraine led to a decrease in car sales (-12.9% within a year, from 7 to 6.1 million) in first nine months of 2022 Sales increased slightly, however, to 203 billion euros (+8.8% ), and Ebit climbed from 13.953 to 17.097 billion euros (+22.6%), so the Ebit margin increased from 7.5% to 8.6%. The automotive division’s net cash stood at 31.6 billion euros as of September 30. Volkswagen is a balanced, financially healthy group with a portfolio of well-known brands and a luxury segment that brings in two-thirds of operating profit. In this environment, at roughly 4 times expected earnings for 2022 and 2023, 0.3 times sales and 0.4 times book value, and with a total dividend yield of nearly 6%, the stock is not only cheap , it’s a real bargain. Europe’s largest car manufacturer deserves a (big) increase in its valuation, and therefore also its share price, in the coming months. Advice: buyRisk: lowRating: 1ACourse: 137.10 eurosTicker: VOW3 GYISIN code: DE0007664039Market: FrankfurtCapit. market: 81.25 billion EURC/B 2021: 4C/B expected 2022: 4Perf. course for 12 months: -25%Perf. share price since 01/01: -23% Dividend yield: 5.5%

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