VW Reports Strong Figures – And Fears Expropriation in Russia

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Let’s start with the good news: The Volkswagen Group (VWAGY) reported strong results last year despite the global chip shortage. Sales increased by 12% year-on-year to 250 billion euros. Net income after taxes even rose 75% to 15.5 billion euros.

VW Dividend Rises Significantly

Income investors can also rejoice. The Wolfsburg-based company is increasing its dividend by a further 2.70 euros per share compared with the previous year. Preferred shares will now receive 7.56 euros and common shares 7.50 euros. If you invested in VW, the dividend will be paid out after the Annual General Meeting on May 12, 2022. 

Analysts’ Estimates Exceeded

Jose Asumendi, an analyst at U.S. investment bank JPMorgan, stresses that Volkswagen performed strongly and well above expectations despite problems. He also praises the outlook as “very solid”, with some reservations. Those reservations have nothing to do with supply chains’ disruption again due to COVID-19 infections in China, but rather with the Ukraine war.

Ukraine War Could Weigh More Heavily on VW Than COVID-19

VW CEO Herbert Diess pointed out just a few days ago that the war’s impact on the European economy, and thus on VW, could be even more severe than the COVID-19 crisis. 

VW, along with Mercedes and Lufthansa, is one of the German groups with threats of expropriation in Russia. Dmitry Medvedev, the deputy head of the Russian Security Council, already announced last week that he would initiate insolvency proceedings against foreign companies and nationalize them.

17 of 23 analysts continue to recommend VW shares as a buy. However, analyst price targets are very far apart. The average analyst price target is 239 euros, but the lowest is 117 euros. Last year, Volkswagen executives were aiming to become the world’s largest EV manufacturer. It will be exciting to see how the future plays out for VW.

Dr. Gregor Bauer
Dr. Gregor Bauer
Dr. Gregor Bauer credits his trading success to combining fundamental aspects of a trade with expert technical analysis. A Certified Financial Technician from the International Federation of Technical Analysts (IFTA), he’s rated as one of Germany’s top 300 economic experts.
Dr. Gregor Bauer
Dr. Gregor Bauer
Dr. Gregor Bauer credits his trading success to combining fundamental aspects of a trade with expert technical analysis. A Certified Financial Technician from the International Federation of Technical Analysts (IFTA), he’s rated as one of Germany’s top 300 economic experts.

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