Volkswagen

Company Update:
Volkswagen's Q3 results were slightly below expectations, with revenue of €75.3bn (-6.3% YoY) missing consensus by 2.5% and an operating loss of €5.86bn, 4% worse than expected. The loss was largely driven by €7.8bn of previously flagged exceptional charges, mainly Porsche goodwill impairments.

EPS was slightly better than expected, while Automotive FCF of €1.23bn beat consensus by 6%, although it benefited from €0.8bn of M&A proceeds. Underlying FCF was just €0.2bn.

Importantly, it maintained FY2026 guidance in full, including an operating margin of up to 1% and Automotive FCF of €3–6bn. Overall, a slightly disappointing quarter, but with limited scope for a negative market reaction given the pre-announced exceptional charges and unchanged guidance.

Expert Opinion:
This is a disappointing performance. Automotive momentum remains negative. We still think there is massive upside in the name if (when?) Europe becomes more aggressive about protecting its internal market from Chinese competition. Contrarian risky buy.


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