BofA Cuts Volkswagen Price Objective, Forecasts Ahead of Q2 Earnings

05:19 AM EDT, 07/23/2026 (MT Newswires) -- BofA Global Research lowered its price objective and earnings assumptions for Volkswagen (VOW.F), forecasting the German carmaker's second-quarter results will be aligned with market expectations. "VW reports Q2 results on 24 July. Following the 13 July pre-close call, we expect limited surprises, with our estimates broadly in line with consensus. We forecast a 4.7% Group operating margin, or 5.2% excluding cEUR400m of special items related to the Bosch [joint venture] termination and residual-value adjustments at Financial Services," analysts said Wednesday. "Our forecast would put VW at the low end of its 4.0-5.5% FY26 margin guidance in H1. We expect VW to retain both its margin and EUR3-6bn automotive net cash flow guidance for now, although our FY26 margin forecast stands at just 4.1%." The research firm noted that potential restructuring costs are currently excluded in its model, though the charges could be balanced out by an expected revaluation gain from sale of its Everllence business. BofA added that a "more painful" restructuring, with possible plant closures, disposals and capacity cuts, could unlock value and make Volkswagen "considerably more competitive." "VW's share price is down by c30% y-t-d and c6% since the press reports on additional restructuring. We think consensus estimates need to come down for FY26-28 and also lower our estimates, but nevertheless we think current valuation is too low since we still expect earnings to grow in FY27/28 (particularly on an adj. basis). Once VW will talk about potential restructuring savings (possibly in Q4), we think investors will pay more attention to the valuation," the note said. Within this context, analysts reduced their price objective to 90 euros from 99 euros, with an unchanged buy rating. BofA's EPS and EBITDA estimates for full-year 2026 through 2028 were also revised downwards.