VWAPY - Volkswagen: FY Guidance Reiterated. Strong Buy Confirmed

2024-05-04 05:10:27 ET

Summary

• No visible impact from Volkswagen's efficiency program yet; however, the company set aside €900 million in provisions for Q2.
• Positive news from the Chinese Capital Market Day. 40% cost reduction target and lower delivery time.
• The company remains confident about top-line sales and margins, confirming its 2024 guidance. Therefore, we maintain our strong buy recommendation.

April was a busy month for Volkswagen Group (VWAGY) (VLKAF) (VWAPY). On April 24, the company presented a Capital Markets Day in China, and a week later, the Group reported its Q1 numbers. Before commenting on the latest news, since our last update, It Gets Worse Before It Gets Better , we anticipated a challenging and competitive market. Despite that, we have a long-standing buy on the Group that is supported by 1) a lower CAPEX thanks to new collaborations, 2) a cost-saving plan in progress, 3) a tasty dividend yield recently increased to €9 per share, 4) a solid balance sheet and a negative stub value on a sum-of-the-part valuation....

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