Volkswagen (ETR:VOWG_p), the German car manufacturer, has adjusted its operating profit forecast for 2023 due to third-quarter production losses caused by flooding in Slovenia and rising product costs. The company's shares fell by 2.85% to EUR100.20 ($112.22) by 0849 GMT on Monday. The automaker now expects a third-quarter operating result of 4.9 billion euros ($5.19 billion) and an operating return on sales of approximately 6.2%. This is a significant shift from its previous forecast, which anticipated a sales return of between 7.5% and 8.5%.
For the full year of 2023, Volkswagen projects that its operating result will align with the previous year's figure of EUR 22.5 billion ($25.2 billion). This updated outlook represents a departure from the company's earlier predictions. According to InvestingPro's real-time metrics, Volkswagen's adjusted market cap stands at $62246.19M USD and the company has seen a revenue growth of 20.0% in the last twelve months leading to the second quarter of 2023. This is in line with one of InvestingPro's tips which suggests that Volkswagen's revenue growth has been accelerating.
Deutsche Bank (ETR:DBKGn) analysts have interpreted Volkswagen's warning as a specific issue for the company, rather than an indicator of wider sector trends. This suggests that other companies in the automotive industry may not be facing the same challenges as Volkswagen at this time. However, it's worth noting that Volkswagen is a prominent player in the automobile industry, as highlighted by InvestingPro Tips, and has maintained dividend payments for 32 consecutive years. The dividend yield as of 2023 stands at 7.53%, which is a significant return to shareholders.
Volkswagen's stock generally trades with low price volatility, another insight provided by InvestingPro Tips. Despite the recent dip, the company's shares are trading at a low Price / Book multiple of 0.36 and a P/E ratio of 4.73. This suggests that the company's shares may be undervalued, offering potential opportunities for investors. For investors seeking more insights like these, InvestingPro offers a plethora of additional tips and real-time metrics which can be accessed here.
The company's fair value, according to InvestingPro, is estimated to be $149.25 USD, indicating potential for growth. Nonetheless, investors should be aware that the company's gross profit margin stands at 17.84%, which, according to InvestingPro Tips, suggests weak gross profit margins. This could impact the company's profitability in the future. Volkswagen is expected to announce its next earnings on October 26, 2023, which will provide further insights into the company's performance and future outlook.
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