Volkswagen: Oddo still a buyer - welcomes 'recovery story'

(CercleFinance.com) - Oddo BHF today announced that it is maintaining its "buy" rating on the Volkswagen share, after a review provided by the management of the German group's flagship brand and an update to the targets of its Transform 2025+ strategic plan.


The group's target of slight growth in global sales remains within reach (+1.2% over 11 months, after a 5% decline in November), as a fall in volumes of less than 12% would be enough to maintain sales at their level of 2017. In terms of profitability, the VW brand still targets the lower end of the range of 4% to 5% for its underlying OM (the broker expects slightly under 4%), considering that Q4 will still incur significant transport and logistics costs to deliver the many WLPT vehicles that are in stock, Oddo BHF notes, which also believes that Volkswagen's main internal challenge will be to properly manage the start to its electric vehicle offer.

The Volkswagen brand, which has historically been the group's Achilles heel, is at the heart of Volkswagen's recovery story. Management's message demonstrates that it is not remaining inactive in the face of the pressure related to additional costs and investments imposed by technological and environmental constraints, Oddo BHF appreciates. The broker is therefore reinstating its target price of 188 euros for the share, which suggests upside potential of around 31%.

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