LONDON/FRANKFURT — When the market value of Germany’s Volkswagen briefly rose over the 100-billion-euro mark on Wednesday for the to start with time since 2015, the boss of the commonly staid carmaker took to Twitter, Elon Musk-fashion, to crow about it.
VW shares soared as significantly as 6% just after expense financial institution UBS elevated its cost target on the inventory by 50% and explained the firm’s new electric powered car or truck platform was set to problem Tesla’s dominance in the battery electrical motor vehicle (BEV) current market.
Herbert Diess, chief government of VW Team, highlighted the UBS observe on Twitter and shared the market capitalisation milestone.
“The market place has been waiting for our #BEV-ramp-up and required to see some evidence details,” Diess posted.
Analysts from @UBSschweiz tore down our ID.3 – and raised their selling price goal by 50 percent to 300 euros afterwards. The marketplace has been waiting for our #BEV-ramp-up and preferred to see some evidence details, so in this article we are…(2/2)
— Herbert Diess (@Herbert_Diess)
March 3, 2021
Traders reacted with comparisons to Tesla main Elon Musk who routinely makes use of Twitter to discuss up items created by his organizations, cryptocurrencies or other buzzing systems.
The comparison, at least for now, have to conclude there.
Diess despatched his initially tweet employing the “@Herbert_Diess” cope with considerably less than two months back and has considering the fact that tweeted 51 occasions. Even though he has managed to amass pretty much 25,000 followers in this time, Musk can boast of 48.3 million.
“The sheer point that he begun his have account apart from the formal VW account tells me, that involving the lines he needs to specific: We are listed here,” a Germany-dependent trader stated.
While unrelated and much more a industry-relocating tweet, a further trader highlighted situations of a probe by the U.S. Securities and Exchange Commision on Musk’s tweet in 2018 that he was thinking about using Tesla private at $420 a share.
EV RACE VS. Current market CAP RACE
But inspite of modern share value gains — up 20% this calendar year — VW’s industry capitalization is just a single-sixth that of Tesla. Shares trade 7.5 periods 12-month forward earnings quite possibly its job in the EV transition is not fully priced.
Tesla meanwhile trades at 160 times 12-thirty day period forward earnings, levels lots of look at bubble-like.
On the industry capitalization gap, UBS explained VW’s only will take into account its EV company out to 2025, and will not cost its income circulation-rich legacy business, indicating there is area for the share selling price to rise.
It extra that VW would very likely “master” the transition to close the volume hole with Tesla in 2022.
At 300 euros, UBS has the most bullish rate concentrate on on VW. Analysts’ median price tag focus on on its shares was 191 euros, in accordance to Refinitiv facts.
Favored shares, which are detailed in Germany’s benchmark DAX index, hit January 2018 highs on Wednesday, even though everyday shares rose as significantly as 5.6% to their best since July 2015, two months just before the diesel scandal broke.
VW shut 4.7% bigger at 185.18 euros for each share on the working day, taking its current market value to 99 billion euros.
Tesla vs VW https://fingfx.thomsonreuters.com/gfx/buzz/ygdvzellrpw/Pasted%20image%201614767907811.png
(Reporting by Thyagaraju Adinarayan in London and Christoph Seitz in Frankfurt Editing by Sujata Rao and Jonathan Oatis)
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