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Volkswagen AG (VWAGY) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
·3-min read

Volkswagen AG (VWAGY) closed at $32 in the latest trading session, marking a +1.62% move from the prior day. This change outpaced the S&P 500's 0.3% gain on the day.

Prior to today's trading, shares of the company had gained 0.99% over the past month. This has lagged the Auto-Tires-Trucks sector's gain of 7.57% and the S&P 500's gain of 4.28% in that time.

VWAGY will be looking to display strength as it nears its next earnings release. In that report, analysts expect VWAGY to post earnings of $0.47 per share. This would mark a year-over-year decline of 21.67%.

VWAGY's full-year Zacks Consensus Estimates are calling for earnings of $3.19 per share and revenue of $292.33 billion. These results would represent year-over-year changes of +61.11% and +15.86%, respectively.

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Investors should also note any recent changes to analyst estimates for VWAGY. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 6.45% lower. VWAGY is holding a Zacks Rank of #5 (Strong Sell) right now.

In terms of valuation, VWAGY is currently trading at a Forward P/E ratio of 9.86. For comparison, its industry has an average Forward P/E of 11.59, which means VWAGY is trading at a discount to the group.

Investors should also note that VWAGY has a PEG ratio of 0.94 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. VWAGY's industry had an average PEG ratio of 0.45 as of yesterday's close.

The Automotive - Foreign industry is part of the Auto-Tires-Trucks sector. This industry currently has a Zacks Industry Rank of 222, which puts it in the bottom 13% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow VWAGY in the coming trading sessions, be sure to utilize Zacks.com.


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