Investment Idea

No signs of weakness in Volkswagen when Ford profit warns

22 Sep 2022 | 2 min read

The car manufacturing-industry was hit hard by supply-chain constraints amidst the coronavirus two years ago, with global computer-chip shortages slowing down production.

This week, the car manufacturer Ford announced a profit warning saying it expects to see Q3 profits get hit by $1b in additional supply-chain-induced costs. The company will end the Q3-quarter with 40 000 to 45 000 vehicles almost completed, but still missing certain components. Therefore, Ford will not be able to deliver the vehicles to dealers. In addition, the automaker emphasized that a large portion of the uncompleted models include their most profitable SUV- and Sport-utility- segment that generate a significant share of Ford´s profit.

Meanwhile, Volkswagen seems to perform strong as the carmaker is pursuing its plan to put Porsche on the stock market. The listing will occur at a valuation $75b and as part of the deal, Volkswagen plans to sell 25 per cent of the company. Volkswagens proceeds from the sale of ordinary and preferred shares is estimated to between 18.1b and 19.1b euros. Upon completion of the listing, Volkswagen plans to distribute 49 per cent of the total proceeds, or roughly 8.9b to 9.6b euros, to its shareholders in early 2023 as a special dividend. As of now, the transaction-process is still in an early phase. However, the Volkswagen share value might offer some potential as attention for the proceeds becomes more current.

Volkswagen (in EUR), daily 12-month share price chart

Source: Infront and Carlsquare. Note: Past performance is not a reliable indicator of future results.

Volkswagen (in EUR), weekly five-year chart

Source: Infront and Carlsquare. Note: Past performance is not a reliable indicator of future results

The full name for abbreviations used in the previous text:

EMA 9: 9-day exponential moving average

Fibonacci: There are several Fibonacci lines used in technical analysis. Fibonacci numbers are a sequence of numbers in which each successive number is the sum of the two previous numbers.

MA20: 20-day moving average

MA50: 50-day moving average

MA100: 100-day moving average

MA200: 200-day moving average

MACD: Moving average convergence divergence


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