volkswagen emden plant
Investor's Corner

Volkswagen toppled as Europe’s most valuable automaker

Volkswagen's Emden Plant (Credit: Volkswagen)

Porsche has recently toppled Volkswagen to become Europe’s most valuable automaker at 85 billion euros.

According to Reuters, Porsche (XETRA: P911) stock temporarily surged, making the German sports car manufacturer the most valuable European automaker. Porsche stock temporarily hit 93 euros per share, giving the company a valuation of 85 billion euros, over 5 billion euros more than Volkswagen’s (XETRA: VOW3) valuation that has long held the title.

Porsche’s stock has been turbulent, to say the least, rising and falling above and below their recent IPO price (82.50 euros) multiple times over the past five days; the stock now sitting at roughly 90 euros per share today. However, the stock has not followed the trend of other automakers, who have seen dramatic drops in valuation over the past month.

Specifically, many auto manufacturers worldwide have seen dramatic drops in share prices, sometimes defying successful production and delivery quarters.

Porsche stock instability may indicate outside factor effects more than actual changes in company valuation. European currencies, notably the pound and the euro, have inflated dramatically over the past month, nearing and falling below the US dollar valuation for the first time in decades. At the same time, European stocks generally have been hit as the continent’s energy crisis only seems to worsen as news of possible sabotage to the Nordsteam pipeline surfaces over the past week.

Despite this range of negative factors, Porsche stock has not dropped as many other automakers’ have, indicating that investors remain interested in the prospect of funding the luxury car maker.

What remains unclear is if Porsche’s stock will continue to weather the storm or if it will follow the likes of Volkswagen, Tesla, Ford, and other manufacturers in dropping share prices. Further, will Europe’s inflationary woes and energy crisis persist into the new year? The continuation or end of either of these factors could generally correct a troubled European market.

William is not invested in Porsche or Volkswagen.

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Volkswagen toppled as Europe’s most valuable automaker
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