Volkswagen Shares Tumble as Q1 Operating Profit Slips 14% and Union Talks Stall on Job Cuts
Published on 06/29/2026 at 18:28 | Redaktion boerse-global.de
Volkswagen’s stock extended its 2026 slide on Monday, shedding nearly 4% to close at €71.66 – a whisker away from its 52-week trough. The selloff has now erased almost 30% of the equity’s value since January, deepening the disconnect between the automaker’s ambitious turnaround blueprint and the market’s growing impatience.
The immediate trigger for the latest leg lower was a lack of clarity from management on the scale of job reductions. The group’s works council received a reply from the board on Monday, but it conspicuously omitted the requested impact on headcount. An internal memo acknowledged that the cost-cutting programme launched so far is considered insufficient by the executive board. That vacuum has been filled by media reports suggesting up to 100,000 positions could be on the line and four German plants face closure, prompting the federal government to signal it will block any factory shutdowns in the automotive sector.
The political dimension is complicating what is already a punishing operational backdrop. Volkswagen’s first?quarter operating profit dropped 14% year?on?year to €2.5 billion, while the group’s operating return on sales contracted to 3.3%. Those figures underscore the pressure on management to deliver structural savings, yet the lack of concrete numbers on workforce reductions leaves investors guessing about the true cost of the overhaul.
Should investors sell immediately? Or is it worth buying Volkswagen?
Analysts are split on the stock’s trajectory. UBS’s Patrick Hummel retains a “Neutral” rating and a price target of €90 for the preference shares, arguing the market needs verifiable facts before pricing in any recovery. Across the Atlantic, Jefferies’ Philippe Houchois is more optimistic, even after slashing his target from €130 to €120. He maintains a “Buy” stance, pointing to improved contract terms for the planned disposal of the “Everllence” unit as a means to strengthen the balance sheet and sharpen focus on the European core. The Everllence sale, if it closes smoothly, could provide a welcome liquidity injection during a period of heavy restructuring charges.
Technical indicators underscore how deeply oversold the stock has become. The relative strength index plunged to 20.4 on Monday, a level that historically suggests a bounce may be imminent – though no such reversal has materialised yet. The share price is now 24% below its 200?day moving average of €94.66, confirming the protracted downtrend that has gripped Wolfsburg.
External headwinds are not letting up. The European Union has already imposed retaliatory tariffs on Chinese electric vehicles, and more political instruments to counter overcapacity from the Far East could be in place by the autumn. Complicating matters further, new German tax rules for EV charging now require precise electricity documentation, adding an administrative layer that fleet operators and private buyers alike are finding burdensome.
The next major milestone for investors is the half?year report, due on 24 July 2026. Until then, the market will be parsing every scrap of information from the management’s dialogue with labour representatives – and any concrete numbers on headcount or plant closures that might finally answer the question hanging over the stock: how deep will the knife go?
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