Corporate Finance Case Study: Volkswagen Essay

Volkswagen (VW)Volkswagen (VW) is a German political machine maker which was in the first place founded in 1937. Now VW Group is wholeness of earths leading automobile manufacturers and the largest carmaker in Europe, with its recent head buttocks in Wolfsburg. VW is one of the ten brands under VW Group. (Volkswagen Homepage, 2011) 2011 VWs revenue is 159,337 zillion EUR lettuce income is 15,409 million EUR, with a amplification margin of 9.6707%. (Bloomberg, 2012) The change magnitude from 2010 to 2011 is illustrated obviously in the fol scummying chart. (Bloomberg, 2012)Income contestation for Volkswagen AG (VOW) 2010-2011, Bloomberg, 2012 Volkswagen depot (VOW GR)The current voice price, close (Apr 13, 2012) is 119.3 EUR, its 52-week range is 82.350 138.800 EUR, and its 1- form return is 14.26%, as well as, market capitalization is 56,601.00 million EUR. (Bloomberg, 2012) Interactive One-year Stock chart for Volkswagen AG (VOW), Bloomberg, 2011-2012 VOWs Earning Pe r luck (ttm) is 33.1 EUR, current P/E proportion (ttm) is 3.5408, and Dividend Per Share (yield annualized) is 1.8771 EUR. (Bloomberg, 2012) beat AnalysisIn order to suck up a resultant for VWs stock rating, SWOT abbreviation is conducted in this part. Strengths gamy product timberStrong brand equityVW conferences brand portfolio includes Audi, Bentley, Bugatti, Lamborghini, SEAT, 49.9% of Porsche, Giugiaro, koda marques and the truck manufacturer Scania and domain. (VW Homepage, 2012) Strong R&DWeaknessesHigh costs for implementing the new modular applied science (Just-auto, 2012) Inadequate focus on shell outowner interests (VW Corporate Governance Code,2010) Comparatively low productivityOpportunitiesGood return on VW stocksVW Group Share EPS 2003-2010, VW investor relations, 2012Large purchasing power increase in Chinese marketAcquisitionsThe Volkswagen Group keep its strategic appendage trajectory by getting Porsche Holding Salzburg and increasing its stake in MA N SE. (VW ad hoc, 2011) ThreatsEuro-zones debt crisis and therefore global recession in 2011 change magnitude fuel priceStrong ambition from Japanese and American manufacturersSuch as Ford, Toyota, Honda, e.t.c.Stock RatingThe investment finale made in this report is to bread and butter VW stock, namely equal-weight as its stock rating. stolon of all, VW has good performance in conclusion year for instance, both(prenominal) VWs revenue and net income grew considerably from 2010 to 2011, even with the negative cultivate from European debt crisis in the 4th quarter of 2011. Moreover, last year VW Group continued its strategic step-up by getting 49.9% of Porsche and increasing its stake in MAN SE. This year only in January and February, VW rider Cars delivery to customers reached the number of 818,800, with an 8% growth comparing with the same time of last year. In addition, VWs market is increase continuously and dramatically in china these years. Until 2018, VWs goal of m arket growth in China is 29.1%. (VW strategy 2018, 2012)Secondly, VW shares valuation and earning kept ontogenesis stably under the recent years, await 2009. For example, stocks EPS grew substantially from 2005 to 2010, which is illustrated understandably in VW Group Share EPS 2003-2010 chart above. Last but not least, from the long-term perspective, VW has very good potential of strategically growth. According to VWs strategic end 2018, their future vision is to become the worlds most profitable, fascinating and sustainable automobile manufacturer. Furthermore, even immediately VW has already very high customer happiness (rating scale 8.55 out of 10, 2011) because its high spirit and service standards.In order to draw aconclusion, if we look into the previous SWOT analysis again, todays interior(a) weakness could become tomorrows strength applying new modular crosswise toolkit technique would bring large profit to VW in the long-run, in spite of todays high R&D and impleme nting costs. Thus, VW share is a good excerpt for long-term investment. Nevertheless, taking the external threats into consideration, particularly facing nowadays depression for both automobile industry and global economy, stock investment should be very cautious, therefore, in summary, we rated VW stock as equal-weight, which means it is recommended to ascertain the share as long-term investment.ReferencesBloomberg, 2012. http//www.bloomberg.com/ iterate/VOWGRJust-auto, 2012. http//www.just-auto.com/news/4-volkswagen-hikes-2011-operating-profit-59-to-new-record_id120644.aspx Volkswagen Homepage, 2011. http//www.volkswagenag.com/ bailiwick/vwcorp/content/en/homepage.html VW strategy 2018, 2012. http//www.volkswagenag.com/content/vwcorp/info_center/en/talks_and_presentations/2012/03/JPK_IK_2012_Part_III_.bin.html/binarystorageitem/file/Part_III_Charts_Winterkorn.pdf