(CercleFinance.com) – Volkswagen shares rebounded slightly on Monday morning following its severe correction on Friday, which was caused by preliminary 4th quarter results considered disappointing.
Around 10:30 a.m., the action of the German automobile group regained 1.4% after having fallen by almost 5% on Friday, mainly due to lower-than-expected forecasts for 2024.
VW said on Friday it expected revenue growth of 5% this year, as well as gross operating profit of 23.7 billion to 25.4 billion euros, targets well above consensus estimates.
But the manufacturer also warned that the free cash flow (FCF) of its automotive activities would only be between 4.5 and 6.5 billion euros, far from the consensus of 8.2 billion euros.
For analysts at Deutsche Bank, Volkswagen is the victim of overly ambitious forecasts established by the market.
‘The company has chosen to exercise a certain degree of caution,’ the design office acknowledged this morning.
‘But we note that the company was criticized last year for having set too optimistic objectives,’ he adds. ‘We are therefore considering potential good surprises this year,’ says DB.
At Oddo BHF, which lowers its price target from 115 to 110 euros, we are talking about objectives in terms of operating margin and ‘flavorless’ FCF.
But it is the UBS teams who are being the most severe.
‘Unlike Mercedes-Benz or Stellantis, VW continues to reinvest its post-dividend FCF in areas where results are highly uncertain, instead of redistributing it to its shareholders,’ laments UBS, which renews its ‘sell’ recommendation ‘ on the title.
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