Volkswagen: Jefferies maintains 'buy' after diesel fine

(CercleFinance.com) - American broker Jefferies maintains its "buy" rating and a 220-euro target price on Volkswagen shares after the German carmaker was fined 1 billion euros by German authorities for its involvement in the "Dieselgate" scandal.


According to analysts, the fine is likely to be a "relief overall," they write in a research note.

"While the 1 billion euros fine levied by the German Federal Prosecutor against VW is larger than we had expected but also modest overall (two euros per share vs gross/net auto liquidity of 28 euros/25 billion euros at end of first-quarter)," they said.

For Jefferies, it should now be considered as a relief for shareholders by improving visibility, possibly setting a limit on EU diesel-related fines and a benchmark for other car makers.

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