LONDON/FRANKFURT — When the market worth of Germany’s Volkswagen briefly rose above the 100-billion-euro mark on Wednesday for the primary time since 2015, the boss of the usually staid carmaker took to Twitter, Elon Musk-style, to crow about it.
VW shares soared as a lot as 6% after funding financial institution UBS raised its value goal on the inventory by 50% and mentioned the corporate’s new electrical automobile platform was set to problem Tesla’s dominance within the battery electrical automobile (BEV) market.
Herbert Diess, chief govt of VW Group, highlighted the united statesnote on Twitter and shared the market capitalisation milestone.
“The market has been ready for our #BEV-ramp-up and needed to see some proof factors,” Diess posted.
Analysts from @UBSschweiz tore down our ID.3 – and raised their value goal by 50 p.c to 300 euros afterwards. The market has been ready for our #BEV-ramp-up and needed to see some proof factors, so right here we’re…(2/2)
— Herbert Diess (@Herbert_Diess)
March 3, 2021
Merchants reacted with comparisons to Tesla chief Elon Musk who regularly makes use of Twitter to speak up merchandise developed by his corporations, cryptocurrencies or different buzzing applied sciences.
The comparability, not less than for now, should finish there.
Diess despatched his first tweet utilizing the “@Herbert_Diess” deal with lower than two months in the past and has since tweeted 51 instances. Whereas he has managed to amass virtually 25,000 followers on this time, Musk can boast of 48.3 million.
“The sheer undeniable fact that he began his personal account aside from the official VW account tells me, that between the strains he desires to specific: We’re right here,” a Germany-based dealer mentioned.
Although unrelated and extra a market-moving tweet, one other dealer highlighted situations of a probe by the U.S. Securities and Change Commision on Musk’s tweet in 2018 that he was contemplating taking Tesla personal at $420 a share.
EV RACE VS. MARKET CAP RACE
However regardless of current share value features — up 20% this 12 months — VW’s market capitalization is simply one-sixth that of Tesla. Shares commerce 7.5 instances 12-month ahead earnings; presumably its position within the EV transition isn’t totally priced.
Tesla in the meantime trades at 160 instances 12-month ahead earnings, ranges many take into account bubble-like.
Available on the market capitalization hole, UBS mentioned VW’s solely takes under consideration its EV enterprise out to 2025, and does not value its money flow-rich legacy enterprise, indicating there’s room for the share value to rise.
It added that VW would doubtless “grasp” the transition to shut the quantity hole with Tesla in 2022.
At 300 euros, UBS has probably the most bullish value goal on VW. Analysts’ median value goal on its shares was 191 euros, in keeping with Refinitiv knowledge.
Most well-liked shares, that are listed in Germany’s benchmark DAX index, hit January 2018 highs on Wednesday, whereas strange shares rose as a lot as 5.6% to their highest since July 2015, two months earlier than the diesel scandal broke.
VW closed 4.7% increased at 185.18 euros per share on the day, taking its market worth to 99 billion euros.
Tesla vs VW https://fingfx.thomsonreuters.com/gfx/buzz/ygdvzellrpw/Pastedpercent20imagepercent201614767907811.png
(Reporting by Thyagaraju Adinarayan in London and Christoph Seitz in Frankfurt; Enhancing by Sujata Rao and Jonathan Oatis)
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