Deutsche Bank: Volkswagen Underlying Profitability Intact Despite FY26 Outlook Cut

04:29 AM EDT, 09/21/2026 (MT Newswires) -- Deutsche Bank Research said Monday it maintained its view that Volkswagen's (VOW.F, VOW3.F) underlying profitability remains intact after a sharp downward revision to the German carmaker's full-year 2026 margin outlook. Volkswagen announced on Sept. 18 that it revised its 2026 operating margin guidance to up to 1%, down from the previous target of 4% to 5.5% and below the consensus estimate of 4.1%. However, analysts highlighted that once the 10 billion euros in special charges are excluded, Volkswagen's underlying margin comes in at 4%, broadly aligned with market expectations. "The earnings miss is largely driven by special items, with underlying profitability remaining broadly consistent with consensus expectations. Said differently, EUR10bn of charges are eye-catching. But what matters for equity holders, is that underlying margins remain around 4% and cash generation remains intact. In our view, the announcement does not materially alter the core investment debate. Investors have long expected that restructuring a company of VW's scale would involve substantial charges and asset write-downs," the research firm wrote. Going forward, analysts said the core investment debate hinges on management's ability to defend cash flow while gradually restoring underlying profitability. "On both metrics, the ad hoc was arguably more reassuring than the headline numbers suggests," the note said. Deutsche Bank has a buy rating and a price target of 115 euros on the stock.