VOW3:DEU - Embedded Expectations Analysis - 2018 04 09
Volkswagen Aktiengesellschaft (VOW3:DEU) currently trades near historical highs relative to UAFRS-based (Uniform) Assets, with a 1.1x Uniform P/B, implying bullish expectations for the firm. However, management has concerns about liquidity, their portfolio, and regulationSpecifically, management may lack confidence in their ability to maintain strong automotive net liquidity, and may be exaggerating their focus on free cash flow generation. Also, they may be downplaying concerns about their portfolio optimization and structural change negotiations with the Supervisory Board, and may also be downplaying concerns about their Brazilian and North American operations. Finally, they may lack confidence in their ability to convey to customers that Euro 6 engines are not affected by any driving ban, and may be downplaying concerns about their increasing CO2 levels as a result of their shifting product mix
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