FRANKFURT (dpa-AFX) - A recommendation from investment house Jefferies drove Volkswagen shares on Tuesday. The papers rose in the morning at the top of the Dax to 111.10 euros. Most recently, they were still up around two and a half percent at 110.08 euros. They were thus wrestling with the 21-day line. However, this short-term trend indicator is still pointing downwards.

Jefferies analyst Philippe Houchois is now more optimistic about the papers and raised his price target from 115 to 150 euros. Although the carmaker is a "slow-moving tanker", there should be huge improvements on the cost side at the core brand and in working capital in 2024, the expert believes. Based on the new price target, he sees sufficient room for a double upgrade from "underperform" to "buy."

Volkswagen shares have been under pressure for months. Since the interim high at the beginning of March, they had lost up to 27 percent to an annual low of 104.48 euros in the first half of September. One reason for the losses are concerns about increasingly strong electric car competition from China.

Only at the beginning of September, analyst Patrick Hummel from the major Swiss bank had emphasized in a study the headwind that Volkswagen was also facing in Europe from Chinese electric cars. This is generally underestimated. On a global level, the Wolfsburg company is also being squeezed hardest by increasing competition from China.

At the same time, the topic of growing Chinese competition was brought into sharper focus by the IAA Mobility car and transport show in Munich. As demand for electronics continues to grow, Chinese manufacturers are also increasingly pushing into the European market, a fact that became apparent at the IAA, traditionally the in-house trade show for German car brands.

In mid-September, however, the prospect of EU measures against alleged cheap imports as a result of government subsidies for Chinese e-cars provided some relief. EU Commission President Ursula von der Leyen had announced a so-called anti-subsidy investigation against vehicles from China.

"The price of these cars is artificially depressed by huge state subsidies - this distorts our market," the top politician had said in the European Parliament. This is unacceptable, she said. The world markets would be flooded by cheaper Chinese electric cars.

Nevertheless, even such measures would do little to counter the growing pressure in the important Chinese market. VW sales in China, for example, continued to fall in August. At 278,000 vehicles, 6.5 percent fewer cars were sold there than in August 2022, though VW attributed that to an unusually strong month last year, when China had boosted sales with tax breaks.

According to Borsianer, it remains to be seen how far the recovery potential of VW shares will reach against this backdrop. They are still stuck in a downward trend channel that runs between around 96 and about 125 euros. Despite the latest recovery attempt, the losses since the multi-year high in spring 2021 still add up to around 56 percent./mis/tih/nas