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Citi opens 30-day upside catalyst watch on Volkswagen AG

Published 02/23/2024, 08:30 AM
Updated 02/23/2024, 08:33 AM
© Reuters.  Citi opens 30-day upside catalyst watch on Volkswagen AG (VWAGY)
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Citi analysts opened up a 30-day upside catalyst watch on Volkswagen AG (OTC:VWAGY) in a note Friday, maintaining a Buy rating and €158 price target on the stock.

Analysts at the bank said the company's fourth-quarter results announcement on March 13 is the catalyst. They expect the company to release solid earnings and guide better than the still-low consensus earnings for FY24.

"Citi is 5%+ above FY24E VW EPS consensus. We expect VW net cash to increase to over €41bn," wrote the firm. "Like MBG, we think VW may over-deliver on FCF and net cash for FY23 due to lower Q4 inventory – which may force a pre-release (as with MBG)."

Citi adds that while VW may not start a buy-back now, the net industrial cash of €80+ per share could be re-valued in a sector-wide context.

"VW remains cheaper than any other EU OEM," added Citi. "Adjusted for Porsche (€113) and Finco equity (€80), the core is valued at minus €60. VOW3 is up 10% ytd, but the VOW Ords are up 17% – widening the VW pref discount gap."

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