Volkswagen AG : Investors could aim for a turn-around of the trend

12/01/2020 | 02:31am EST

long trade Target price hit

Entry price : 143.6€ | Target : 156€ | Stop-loss : 130€ | Potential : 8.64%

Volkswagen AG shares could get back into a rising trend over the medium term, as suggested by technical indicators. Investors have an opportunity to buy the stock and target the € 156.

Summary

• The company has strong fundamentals. More than 70% of listed companies have a lower mix of growth, profitability, debt and visibility criteria.
• In a short-term perspective, the company has interesting fundamentals.

Strengths

• The close medium term support offers good timing for purchasing the stock.
• The company is in a robust financial situation considering its net cash and margin position.
• The stock, which is currently worth 2020 to 0.23 times its sales, is clearly overvalued in comparison with peers.
• For the last few months, EPS revisions have remained quite promising. Analysts now anticipate higher profitability levels than before.
• Analysts covering this company mostly recommend stock overweighting or purchase.
• The average target price set by analysts covering the stock is above current prices and offers a tremendous appreciation potential.

Weaknesses

• With relatively low growth outlooks, the group is not among those with the highest revenue growth potential.
• For the last twelve months, sales expectations have been significantly downgraded, which means that less important sales volumes are expected for the current fiscal year over the previous period.
• For the past year, analysts have significantly revised downwards their profit estimates.

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