A comprehensive equity research and valuation model for Volkswagen AG (VOW3.DE), built as part of MBA Finance coursework — combining a full 3-statement-linked DCF, trading comparables, and 2D sensitivity analysis to estimate intrinsic value and determine whether VW stock is over- or under-valued.
| Ticker | VOW3.DE (Preferred) / VOW.DE (Ordinary) |
| Exchange | Frankfurt Stock Exchange (XETRA) |
| Headquarters | Wolfsburg, Lower Saxony, Germany |
| Currency | EUR (€ million) |
| Data Range | FY2021–FY2025 Historical | FY2026E–FY2030E Forecast |
| Data Source | Volkswagen AG Annual Reports (2022–2025) + Q1 2026 Interim Report |
Objective: Estimate Volkswagen AG's intrinsic value using a Discounted Cash Flow model, cross-check it against trading comparables, and determine whether the current market price reflects fair value.
Is Volkswagen AG's current market price (€86.40, Preferred) a fair reflection of its intrinsic value based on projected cash flows and fundamentals — or is the stock mispriced?
| # | Sheet | Description |
|---|---|---|
| 1 | Cover | Professional cover page & executive verdict |
| 2 | Assumptions | Revenue growth, margin, CapEx, working capital & WACC inputs |
| 3 | Historical P&L | Income statement, FY2021–FY2025 |
| 4 | Ratio Analysis | Profitability, liquidity, leverage, efficiency ratios |
| 5 | Revenue Forecast | Bear / Base / Bull 3-scenario model, 2026E–2030E |
| 6 | Projected P&L | Forecasted income statement, 2026E–2030E |
| 7 | FCF Build | Free Cash Flow to Firm build — EBIT → FCFF |
| 8 | WACC | Weighted Average Cost of Capital via CAPM |
| 9 | DCF Valuation | Enterprise Value → EV Bridge → Intrinsic Price |
| 10 | Comps | 8 global automotive peers, trading multiples |
| 11 | Sensitivity | 2D data table — WACC × Terminal Growth Rate |
| 12 | Football Field | Valuation range chart across all methods |
| 13 | KPI Dashboard | Executive summary, charts, final verdict |
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue (€M) | 250,200 | 279,232 | 322,284 | 324,656 | 321,913 |
| EBIT (€M) | 19,275 | 22,119 | 22,576 | 19,060 | 8,868 |
| EBIT Margin | 7.70% | 7.92% | 7.01% | 5.87% | 2.75% |
| Net Income (€M) | 14,318 | 14,163 | 16,042 | 10,722 | 6,673 |
| ROE | 9.80% | 7.94% | 8.45% | 5.45% | 3.29% |
⚠️ Key observation: VW's profitability sharply deteriorated in 2025 — EBIT margin collapsed from a historical ~7-8% band to 2.75%, and ROE fell to 3.29%. The DCF forecast assumes a gradual margin recovery to 5.6% by 2030 — this recovery assumption is a critical driver of the valuation conclusion below.
Revenue Growth (Base Case): 2.5% (2026E) → 3.0% → 3.5% → 3.0% → 2.5% (2030E)
EBIT Margin (Base Case): 3.0% (2026E) → 3.9% → 4.7% → 5.2% → 5.6% (2030E) — recovering from the 2025 low
WACC Build (CAPM):
| Component | Value |
|---|---|
| Risk-Free Rate (German 10Y Bund) | 2.80% |
| Equity Risk Premium (Damodaran, EU) | 5.50% |
| VW Beta (5Y monthly vs. DAX) | 1.10 |
| Cost of Equity (CAPM) | 8.85% |
| Pre-Tax Cost of Debt | 4.50% |
| After-Tax Cost of Debt | 3.24% |
| Equity Weight / Debt Weight | 37.0% / 63.0% |
| WACC | 5.32% |
Terminal Growth Rate: 2.0%
| Step | € Million |
|---|---|
| Sum of PV of FCFF (2026E–2030E) | 33,026 |
| PV of Terminal Value (Gordon Growth) | 281,741 |
| Enterprise Value (EV) | 314,767 |
| Less: Total Gross Debt (Automotive) | (71,500) |
| Less: Pension Provisions | (22,826) |
| Less: Non-Controlling Interests | (14,777) |
| Plus: Cash & Cash Equivalents | 38,801 |
| Plus: Marketable Securities | 29,522 |
| Equity Value | 273,987 |
| ÷ Total Shares Outstanding (million) | 501.3 |
| ★ Intrinsic Price per Share | €546.55 |
Terminal Value represents ~89.5% of Enterprise Value — a sanity-check flag common in long-forecast DCFs, and a key reason the model is stress-tested via sensitivity analysis.
Benchmarked against 8 global automotive peers: Toyota, Mercedes-Benz, BMW, Stellantis, Ford, GM, Renault, Honda.
| Metric | Peer Median | Volkswagen AG (Actual) |
|---|---|---|
| EV/EBITDA | 4.20x | 1.62x |
| EV/Revenue | 0.44x | 0.23x |
| P/E (NTM) | 7.5x | 6.3x |
| P/B | 0.9x | 0.2x |
VW trades at a steep discount to peers across every multiple — reinforcing the DCF's undervaluation signal.
Implied Price by Method:
| Method | Implied Price (€) |
|---|---|
| DCF (Base Case) | 546.55 |
| EV/EBITDA Comps | 405.73 |
| EV/Revenue Comps | 298.07 |
| P/E Comps | 99.84 |
| Average of All Methods | 337.55 |
2D data table stress-testing WACC (4%–9%) × Terminal Growth Rate (1%–3.5%).
Key insight: Valuation is highly sensitive to WACC — at the model's calculated WACC of 5.32%, the intrinsic price is €546.55, but at a WACC of ~8–9% (with lower terminal growth), the implied price falls to the €100–150 range, much closer to the current market price. This suggests the market may be implicitly pricing in a significantly higher discount rate (i.e., more risk) than the CAPM-derived WACC used in this model.
| Current Market Price (Preferred) | €86.40 |
| Intrinsic Value — DCF (Base Case) | €546.55 |
| Average of All Methods (DCF + Comps) | €337.55 |
| Upside Potential (DCF vs. Market) | +532.6% |
| Verdict | UNDERVALUED ▲ |
Across every valuation method used — DCF and all three Comps approaches — Volkswagen AG's intrinsic value exceeds its current market price, with the DCF and EV/EBITDA methods showing the largest gaps. However, this conclusion is highly sensitive to the EBIT margin recovery assumption (2.75% → 5.6% by 2030) and the WACC used — both flagged explicitly in the Sensitivity Analysis sheet for transparency.
VW-Financial-Model/
│
├── VW_Financial_Model_ShekharTanwar.xlsx ← Full 13-sheet financial model
└── README.md
- Download
VW_Financial_Model_ShekharTanwar.xlsx - Start with the Cover sheet for the executive verdict
- Review Assumptions to see every hardcoded input (highlighted in blue)
- Follow the flow: Historical P&L → Revenue Forecast → Projected P&L → FCF Build → WACC → DCF Valuation → Comps → Sensitivity → Football Field → KPI Dashboard
- 3-Statement-Linked Financial Modeling
- DCF Valuation (FCFF, Gordon Growth Terminal Value)
- WACC Calculation via CAPM
- Trading Comparables (Comps) Analysis
- 2D Sensitivity / Data Table Analysis
- Scenario Modeling (Bear / Base / Bull)
- Equity Research & Investment Recommendation
This model was prepared solely for educational / MBA coursework purposes. It does not constitute investment advice.
Shekhar Tanwar MBA — Finance & Business Analytics | Maharshi Dayanand University, Rohtak
