Jefferies has maintained its 'Buy' rating on Volkswagen AG with a price target of €125, even as the investment firm lowered its outlook for the automaker's sports car subsidiary Porsche AG. Analyst Philippe Houchois adjusted his estimates for both companies on Sunday, aligning them with Friday's downward forecast revisions. The analyst noted that Volkswagen's historically low valuation presents potential upside, with cost improvements at the core brand and a stabilization in Audi's production cycle identified as key drivers.

For Porsche AG, Jefferies reduced its price target from €47 to €40 while keeping the 'Hold' rating unchanged. Houchois described the turnaround at the Zuffenhausen-based manufacturer as "a protracted story," suggesting that significant recovery may take considerable time. The simultaneous adjustments reflect the interconnected nature of the Volkswagen Group's portfolio companies and the challenges facing the broader automotive sector.

Volkswagen shares traded at €94.94 with a 0.22% gain at the time of the announcement, indicating modest investor confidence despite the mixed analyst outlook. The German automaker's stock performance remains under scrutiny as markets weigh the company's ability to navigate industry headwinds and execute on its strategic initiatives.

The analyst's Volkswagen estimate sits at the upper end of the new target range, suggesting Houchois maintains relative optimism about the parent company's prospects compared to its sports car subsidiary. The divergent ratings highlight the varying expectations for different segments within the Volkswagen Group as the automotive industry continues to face transformation pressures and economic uncertainties.