Analyst Note| Richard Hilgert |
According to media reports on Wednesday, no-moat rated Volkswagen is interested in acquiring daily car rental company Europcar. We see limited to no benefit for Volkswagen to own this asset, other than possible value appreciation during the next several years that may enable the car maker to sell it, once again. Nearly 15 years ago, Volkswagen owned the rent-a-car company and sold it for slightly more than EUR 3.0 billion in May 2006. At this point, the news is only speculation and media reports say there are at least two other interested parties--we see no reason to change our EUR 242 fair value estimate. While near-term uncertainties from COVID-19 create stock market volatility, for long-term patient investors, we view the shares of 4-star rated Volkswagen as attractively valued.