Volkswagen Keeps Deutsche Bank's Buy Rating Despite Trimmed Target as China Slide and Porsche Writedown Bite

Deutsche Bank has trimmed its price target on Volkswagen's preference shares from EUR 105 to EUR 100 while leaving its buy recommendation in place, a two-speed signal that separates the bank from JPMorgan's more guarded stance on the embattled automaker.

Analyst Tim Rokossa cut the target following a sit-down with VW finance chief Arno Antlitz, an exchange he described as constructive. Talks centered on the ongoing restructuring, cost reduction in Germany and the worsening situation in China. The lower target nonetheless shows that even a positive read on management's plans was not enough to justify an unchanged valuation. The stock added 0.6% in the prior session.

Two Banks, Two Verdicts

JPMorgan had already moved on Friday, slashing its target from EUR 110 to EUR 85 after the quarterly figures while reaffirming a neutral rating. Media reports pointed to heavy one-off and write-down effects in the most recent quarter as the trigger. Both houses are marking down their valuation expectations; they part ways on what investors should do about it. A reduced target does not amount to a sell call — Deutsche Bank's underlying view stays positive, whereas JPMorgan remains on the sidelines.

The weaker earnings base explains the caution. Volkswagen booked a net loss after tax of EUR 5.8 billion for the third quarter of 2026, dragged down in large part by a non-cash Porsche goodwill impairment of EUR 6.4 billion. That figure cannot be read simply as a verdict on day-to-day operations — but neither does the write-down excuse the operating problems. Earnings power at the core Volkswagen brand remains the key test of the overhaul.

Nine-Month Profit Collapses

For the first nine months of 2026, the group reported operating profit of EUR 71 million, down from EUR 5,408 million a year earlier. Before special items, operating profit reached EUR 8.8 billion. Management stressed the immediate need for action in light of the nine-month balance sheet. For the full year, Volkswagen expects revenue of around EUR 315 billion and an operating return on sales of up to 1%.

At the brand level, Volkswagen Pkw generated operating profit of EUR 813 million from January to September 2026, a 1.3% operating margin that leaves limited financial headroom.

ID. Golf Work Paused, Not Cancelled

The pressure is already shaping product planning. Volkswagen has temporarily halted development spending on the future ID. Golf until the necessary investments can be reliably reflected in the accounts. Brand chief Thomas Schäfer, quoted by Reuters on Friday, was blunt: "We are pausing, we are not cancelling." Work is to resume once funding is secured — no date has been set. According to IG Metall Wolfsburg, the works council said Friday that the pause has no consequences for the SSP first installer in the T-Roc segment.

The group is targeting a cost program of roughly EUR 31 billion through 2030. The savings are not merely about lifting profitability; at the ID. Golf, the resumption of development work is explicitly tied to whether the investments can be financed.

China and the Road to Emden

China looms over all of it. Deliveries there fell 38.5% in the third quarter of 2026, and the difficult market conditions ranked among the central topics of the Antlitz meeting. On the labor front, Volkswagen intends to lower employment costs and is discussing additional socially compatible personnel instruments with IG Metall, including subsidized transfer companies. The two sides agreed the timetable for collective bargaining on 23 October: talks open on 24 November in Emden and continue on 15 December in Zwickau.

Deutsche Bank's buy rating, then, is no all-clear for the operating business. It sits alongside a lower target and substantial work still to be done on costs, investment and sales. Whether Volkswagen can rebuild more durable earnings power out of the restructuring will decide how the stock is valued from here.