Volkswagen's fair value estimate reduced due to US import tariffs, facing challenges adjusting to tariffs.

From Morningstar: 2025-04-24 10:34:00

Morningstar Equity Research has updated their fair value estimate for Volkswagen to EUR 172 per share, with a Very High Uncertainty Rating due to US import tariffs affecting European automakers. Loyalty rates for domestic car brands are high, with potential market share losses for foreign manufacturers. Despite revisions, Volkswagen trades at a discount but faces challenges adjusting to tariffs.

The impact of US import tariffs will halt Volkswagen’s free cash flow, with lower gross margins and reduced US sales volumes affecting fixed cost absorption. Adjustments to China’s outlook and pricing forecasts lead to a fair value estimate reduction. Despite maintaining guidance for 2025, downward revisions or a retraction are likely due to tariff implications. Operating margin forecast falls below guidance.



Read more at Morningstar: Volkswagen: Cutting Fair Value on US Tariffs and…