Despite very high dividends, disappointment may outweigh investors this week. Should you sell BASF and Volkswagen shares ahead of the quarterly figures?
On Wednesday (October 30, 2024), chemical giant BASF and tumbling car giant Volkswagen will present their latest quarterly figures. Why there can also be a big risk of disappointment despite mega dividends:
Volkswagen shares: things could really crash on Wednesday
Investors will be watching Volkswagen shares closely on Wednesday. Because the analysts’ estimates don’t look good. In the last few weeks, Volkswagen has more and more bad news on the market. Earnings per share are now expected to fall from EUR 8.39 in the third quarter of 2023 to EUR 4.31. EBITDA is also expected to fall from 13.25 billion euros to 4.6 billion euros. At 76.7 billion euros, sales are expected to be only slightly lower than in the same period last year.
But Volkswagen has a glimmer of hope. At 2.175 billion euros, the free cash flow is expected to be much better than the minus 387 million euros from the previous year. For investors, however, these bleak prospects also mean that if Volkswagen surprises in its quarterly figures, the share price could rise significantly. VW shares had already fallen over the past few weeks and are now waiting for a new signal.
However, Volkswagen shares lost nearly 2 percent again today as there were new reports of factory closures in Germany and further job cuts in Wolfsburg. At least three factories in Germany should be closed and thousands of jobs should be lost, according to the reports.
Goldman Sachs analysts are also rather pessimistic about the quarterly figures. The US experts lowered the target price to 114 euros and only recommend holding. The huge dividend at Volkswagen looks very attractive with a dividend yield of 9.08 percent.
But overall this means for investors: tight stops. If you are not yet invested, you should wait for the quarterly figures. Investment is only recommended if you jump over the 50-day line (blue).
But what about BASF?
Game Volkswagen Vz.
(WKN: 766403)
By the way, read later: Expert Kiyosaki warns of mega-crash: This is how the “Rich Dad Poor Dad” author is protecting his assets now!
BASF shares: Will the upward trend continue?
BASF share has been able to develop a nice upward trend in the last few weeks. This must now be justified through Wednesday’s quarterly figures. BASF shares are currently trading at the bottom of the uptrend channel (see chart below) and at the 50-day line (blue). There must now be hope that good quarterly figures will lift the stock above the key level and possibly above the 200-day line as well.
Meanwhile, analysts expect sales of 15.46 billion euros for the chemical giant BASF in the third quarter, which would mean 1.7 percent less than in the same quarter of the previous year. On the other hand, earnings per share of 0.52 euros should be much better than the loss of 18 cents in the same period last year. It is also expected that EBIDTA will be 10.5 percent better and will now be equal to 1.623 billion euros. On the other hand, the free cash flow is expected to be much worse at minus 283 million euros after 1.465 billion euros in the third quarter of 2023.
However, the quarterly figures could surprise investors and cause the stock to jump. In addition to the huge dividend of 5.64 percent, BASF could also deliver a huge surprise in the quarterly figures as many investors and analysts are likely to expect too little due to the gloomy past months.
Although you should wait and be much more careful with Volkswagen shares, you can open your first positions in BASF.
And also read: Millionaire Marc Faber unpacks: The stock market legend is investing in these stocks, gold and real estate
A note on conflicts of interest
The chairman of the board and majority owner of the publisher Börsenmedien AG, Mr. Bernd Förtsch, has directly and indirectly entered into positions on the following financial instruments or related derivatives mentioned in the publication, which can benefit benefit from any price development resulting from the publication. : BASF, Volkswagen Vz..
Note on conflicts of interest:
The chief managing editor, Mr. Frank Pöpsel, has taken direct and indirect positions on the following financial instruments or related derivatives mentioned in the publication, which may benefit from any price development as a result of the publication: Volkswagen Vz.