Volkswagen Shares at Lowest Level Since 2010
Date: 23 June 2026
Overview
Volkswagen AG (VOW1.DE) shares have experienced a significant decline, falling over 2.5% to their lowest levels in 16 years. This downturn follows a downgrade from Citi, which has revised its financial forecasts and price target for the automaker.
Price Target Adjustment
Citi has lowered its price target for Volkswagen from €110 to €94 per share, while the current market price is just under €80. Despite maintaining a 'Buy' rating, analysts recognize that the company's operational outlook is deteriorating.
Challenges in the Chinese Market
The primary concern driving the downgrade is the weakening sales performance in China, a crucial market for Volkswagen. The company faces intense competition from domestic manufacturers, particularly in the electric vehicle sector, which is impacting its market position.
Citi has adjusted its earnings-per-share (EPS) forecasts, predicting an 18% decrease for 2026, 16% for 2027, and 7% for 2028, reflecting lower expected vehicle volumes and reduced profitability.
Profitability and Margin Concerns
Analysts now expect Volkswagen's EBIT margin to drop to 3.9% in fiscal 2026, which is below the company's own guidance range. Additionally, free cash flow is projected to be around €3.5 billion, also at the lower end of management's expectations.
Geopolitical Risks
Citi analysts have pointed out that Volkswagen's challenges are compounded by geopolitical factors, including trade tensions and U.S. tariffs. The company's extensive global manufacturing and distribution network makes it particularly vulnerable to regulatory and political changes.
Market Valuation Insights
Despite the negative outlook, Citi notes that Volkswagen is currently trading at multi-year valuation lows. The bank estimates that Volkswagen's stake in Porsche is worth approximately €65 per share, and its Financial Services division holds around €47 billion in equity, equating to roughly €94 per share.
Future Valuation Scenarios
Citi presents a range of potential valuation outcomes for Volkswagen: a bull case of €120 per share and a bear case of €65 per share. While management is implementing cost-cutting measures, the growing list of challenges makes it difficult for the company to present a compelling growth narrative.
Currently, Volkswagen shares are trading at just under €80, with a price-to-earnings ratio of approximately 7x annual earnings. However, ongoing pressure on margins and sales growth raises concerns about the company's future performance.