(CercleFinance.com) – RBC Capital Markets on Tuesday renewed its ‘outperformance’ opinion on Volkswagen, as well as its target price of 310 euros, following the confirmation by the automotive giant of the plan to IPO of its car subsidiary luxury, Porsche.
In a research note, the Canadian broker points out that it is Volkswagen’s supervisory board that will have the last word in the finalization of the project.
According to RBC, this body could nevertheless constitute a major obstacle to the operation since 12 of the 20 members of the body (namely the representatives of the staff and the Land of Lower Saxony) are likely to oppose the project. .
The broker notes, however, that an IPO of Porsche would generate ‘hidden value’ within the group, particularly at the level of the Porsche brand itself.
By applying a valuation multiple of 15x – comparable to that of Ferrari or other luxury stocks (Burberry, Hermès, LVMH, Prada or Richemont) – the VW share could thus reach a valuation of 480 euros, to be compared with a stock market run of only 192 euros at present, according to the broker’s calculations.
The Porsche brand would be valued alone around 115 billion euros, or 65% of the total enterprise value of VW, argues RBC.
Beyond the aspect related to the creation of value, an IPO of Porsche would be in line with the manufacturer’s ambitions in the field of electrification and software.
RBS warns however that after the introduction of Porsche, this trajectory could require the raising of additional funds, for example via the realization of a possible capital increase.
Copyright © 2022 CercleFinance.com. All rights reserved.
The information and analyzes disseminated by Cercle Finance only constitute a decision-making aid for investors. The responsibility of Cercle Finance cannot be held directly or indirectly following the use of information and analyzes by readers. It is recommended that any uninformed person consult a professional adviser before any investment. This indicative information does not in any way constitute an incitement to sell or a solicitation to buy.
Did you like this article ? Share it with your friends with the buttons below.
