(Bloomberg) -- One of the few analysts to correctly predict a slump in Volkswagen AG shares almost two years ago finally thinks it’s time to buy.

Philippe Houchois of Jefferies double-upgraded the German carmaker’s preference shares from underperform on Tuesday, citing a cheap valuation and the potential for cost cuts at the company.

When Houchois downgraded the stock in November 2021, he was the only analyst with a sell-equivalent rating among 26 tracked by Bloomberg, and hardly any followed suit. Since then, the shares have fallen more than 40%.

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Volkswagen’s descent has seen it underperform a broader autos sector that’s been held back by worries about a recession and higher interest rates. Sluggish electric vehicle sales at the German company and concern about its exposure to an economic slowdown in China have been at the forefront of investor worries.

“Most of what could go wrong at VW has gone wrong, and capitulation has set in,” Houchois and colleague Owen Paterson wrote in a note. They added that there are now “anomalies” in VW’s valuation, noting that its market capitalization of about 59 billion euros ($63 billion) is smaller than its 67 billion-euro stake in Porsche.

Volkswagen shares were up 3% as of 12:27 p.m. in Frankfurt.

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