Can Volkswagen recover after its biggest overhaul?
Volkswagen has once again come under pressure following reports of what could become the largest restructuring program in the company's history. Investors are increasingly questioning whether the automotive giant can maintain profitability amid rising costs and growing global uncertainty.
Volkswagen's latest quarterly earnings came in well below market expectations. Adjusted earnings per share were €2.55, compared with the consensus estimate of €3.44, missing expectations by nearly 26%. Revenue totaled €75.66 billion, versus the expected €78.26 billion, falling short by 3.3%.
The company therefore missed consensus estimates on both of its key financial metrics, highlighting the continued pressure on its automotive business.
Another negative catalyst came from reports of a sweeping restructuring plan. According to Manager Magazin, CEO Oliver Blume is considering cutting up to 100,000 jobs, closing four plants in Germany, and reducing the company's investment program by approximately 15% over the coming years. If implemented, it would mark Volkswagen's largest restructuring in nearly 90 years.
Oversold conditions offer hope for a rebound
On the daily chart, VOW3 has broken below the key long-term support level at €78.80.
The next major liquidity zone lies between €78 and €74. Volkswagen last traded in this range in 2010, highlighting the structural challenges the company is currently facing.
On the positive side, the RSI (14) has entered oversold territory. Historically, VOW3 shares have responded well to this signal, often producing meaningful short-term rebounds.
In addition, with the stock trading roughly 20% below its 200-day simple moving average (SMA), the probability of a technical rebound has increased. The first major resistance level is the psychological €80 mark. A breakout above this level could open the way toward the gap-down level at €81.36.
Volkswagen faces a long road to recovery
The weak quarterly earnings report and plans for a large-scale restructuring indicate that Volkswagen has entered one of the most challenging periods in its history. While cost reductions and workforce cuts should improve operational efficiency, investors are unlikely to see a meaningful financial impact for several more quarters.
Until then, the stock is likely to remain under pressure. To establish a sustainable recovery, Volkswagen will need not only to execute its restructuring plan successfully but also to demonstrate stronger vehicle sales, improved profitability, and the ability to compete more effectively with Chinese electric vehicle manufacturers.
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