Volkswagen (VLKAY) Upbeat On Mid-Term Sales & Profit Outlook

Volkswagen (DE:VOWG_p) AG (OTC:VLKAY) recently increased its mid-term outlook for profit and sales, per a Reuters report. The German automaker anticipates group sales to surpass the sales record of 217 billion euros, achieved in 2016, by more than 25% by 2020. Volkswagen expects strong growth in emerging markets such as Russia and Brazil to drive sales.

Also, the company predicts its 2020 operating profit to surpass the 2016 level of the 7.1 billion euros by more than a quarter despite continuing to invest in electric vehicles and enhanced combustion engine technology. Volkswagen is of the opinion that improvements in productivity, cost restraint and implementation product launches are undoubtedly critical to reach its goals.

Last week, Volkswagen announced that it will invest more than 34 billion euros ($40.06 billion) on zero-emission cars and digital mobility services by 2022. This marks an increase in investment commitment of more than 20 billion euros announced in September.

The recent announcement has instilled investors’ confidence in the stock. The company has also predicted its net cash flow to increase to at least 10 billion euros by 2020 from 4.3 billion in 2016.

Over the past six months, shares of Volkswagen have outperformed the industry it belongs to. The company’s shares have gained 21.2% compared with the industry’s growth of 17%.



Currently, Volkswagen has a Zacks Rank #3 (Hold).

A few better-ranked companies in the auto space are AB Volvo (OTC:VLVLY) , Wabco Holdings Inc. (NYSE:WBC) and PACCAR Inc. (NASDAQ:PCAR) and. While AB Volvo and Wabco Holdings sport a Zacks Rank #1 (Strong Buy), PACCAR carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Volvo has a long-term growth rate of 15%. Its shares have increased 12.1% in the last three months.

Wabco has a long-term growth rate of 15%. Shares of the company have increased 21.9% in the last six months.

PACCAR has a long-term growth rate of 10%. Its shares have increased 7% in the last three months.

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