LONDON/FRANKFURT — When the market worth of Germany’s Volkswagen briefly rose above the 100-billion-euro mark on Wednesday for the primary time since 2015, the boss of the usually staid carmaker took to Twitter, Elon Musk-style, to crow about it.
VW shares soared as a lot as 6% after funding financial institution UBS raised its worth goal on the inventory by 50% and stated the corporate’s new electrical automobile platform was set to problem Tesla’s dominance within the battery electrical automobile (BEV) market.
Herbert Diess, chief government of VW Group, highlighted the usnote on Twitter and shared the market capitalisation milestone.
“The market has been ready for our #BEV-ramp-up and needed to see some proof factors,” Diess posted.
Analysts from @UBSschweiz tore down our ID.3 – and raised their worth goal by 50 p.c to 300 euros afterwards. The market has been ready for our #BEV-ramp-up and needed to see some proof factors, so right here we’re…(2/2)
— Herbert Diess (@Herbert_Diess)
March 3, 2021
Merchants reacted with comparisons to Tesla chief Elon Musk who regularly makes use of Twitter to speak up merchandise developed by his corporations, cryptocurrencies or different buzzing applied sciences.
The comparability, a minimum of for now, should finish there.
Diess despatched his first tweet utilizing the “@Herbert_Diess” deal with lower than two months in the past and has since tweeted 51 occasions. Whereas he has managed to amass nearly 25,000 followers on this time, Musk can boast of 48.3 million.
“The sheer indisputable fact that he began his personal account aside from the official VW account tells me, that between the traces he desires to specific: We’re right here,” a Germany-based dealer stated.
Although unrelated and extra a market-moving tweet, one other dealer highlighted situations of a probe by the U.S. Securities and Trade Commision on Musk’s tweet in 2018 that he was contemplating taking Tesla personal at $420 a share.
EV RACE VS. MARKET CAP RACE
However regardless of latest share worth features — up 20% this 12 months — VW’s market capitalization is simply one-sixth that of Tesla. Shares commerce 7.5 occasions 12-month ahead earnings; presumably its position within the EV transition isn’t absolutely priced.
Tesla in the meantime trades at 160 occasions 12-month ahead earnings, ranges many contemplate bubble-like.
In the marketplace capitalization hole, UBS stated VW’s solely takes under consideration its EV enterprise out to 2025, and does not worth its money flow-rich legacy enterprise, indicating there may be room for the share worth to rise.
It added that VW would seemingly “grasp” the transition to shut the amount hole with Tesla in 2022.
At 300 euros, UBS has probably the most bullish worth goal on VW. Analysts’ median worth goal on its shares was 191 euros, based on Refinitiv information.
Most well-liked shares, that are listed in Germany’s benchmark DAX index, hit January 2018 highs on Wednesday, whereas atypical shares rose as a lot as 5.6% to their highest since July 2015, two months earlier than the diesel scandal broke.
VW closed 4.7% greater at 185.18 euros per share on the day, taking its market worth to 99 billion euros.
Tesla vs VW https://fingfx.thomsonreuters.com/gfx/buzz/ygdvzellrpw/Pastedpercent20imagepercent201614767907811.png
(Reporting by Thyagaraju Adinarayan in London and Christoph Seitz in Frankfurt; Enhancing by Sujata Rao and Jonathan Oatis)