Volkswagen exits Euro Stoxx 50 as index removal adds to pressure on troubled firm
Volkswagen has been removed from the Euro Stoxx 50, the eurozone's benchmark index of its largest listed companies, taking effect as markets opened on Monday just days after Europe's biggest carmaker warned that one-off charges would wipe out most of its profit this year.
Volkswagen, the largest automaker in Europe, has been removed from the Euro Stoxx 50 index, contributing to the pressure on the troubled firm. The index provider Stoxx announced the change in its annual review at the beginning of September, with the removal taking effect before trading on Monday. In its place, Nokia, a Finnish telecoms group, returned to the index, while French utility Engie joined. Wolters Kluwer, a Dutch information-services group, was also dropped from the index.
The removal is based on Volkswagen's declining valuation, which no longer meets the index's threshold. However, the consequences are real as funds tracking the benchmark must now sell their Volkswagen holdings, adding to the pressure on the stock. Volkswagen shares have plummeted nearly 30% since the start of the year and have dropped over 6% since last Monday's open, trading at around €76 at the time of writing.
Analysts had expected the stock to continue its decline, with a profit warning revealing around €10 billion in one-off charges and a reduction of its operating margin forecast for 2026 to no more than 1%, from a previous range of 4% to 5.5%.
The timing could not have been worse for Volkswagen. The company announced the charges, which include a writedown at Porsche, in which it holds a 75.4% stake, after the sports car maker lowered its medium-term expectations. Porsche has been struggling due to American tariffs and weak Chinese demand for foreign luxury brands, achieving a margin of just 1.1% last year.
Additionally, Volkswagen has allocated €2 billion or more for expanded early retirement schemes, impairments in China, and the planned sale of its wholly owned subsidiary, Volkswagen Osnabrück GmbH, a manufacturing plant located in Osnabrück, northwest Germany.
Although some investors view the numbers as a collapse, VW's underlying margin is still around 4%, and the company maintained its cash flow and liquidity forecasts. Deutsche Bank, which rates VW shares as a buy with a target price of €115, believes the headline significantly overstates the deterioration in the company's underlying business.
The bank anticipates further restructuring charges, confirming the complexity and expense of the transformation process, with more charges expected over the coming months. Volkswagen's third-quarter results are due on October 29th.
Written by urgent.news from Euronews Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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