3 reasons why Volkswagen shares are a 'buy'

Volkswagen: 'A big story, big brand, big mistake'?
Volkswagen: 'A big story, big brand, big mistake'?
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Volkswagen issues apology: Is that enough?
Volkswagen's stock is 'dead money': Petrides
Volkswagen's stock is 'dead money': Petrides
'We screwed up': Volkswagen's US chief
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Its stock may have crumbled 18 percent Monday and nearly 20 percent on Tuesday, but some analysts aren't fretting over the future of Volkswagen.

In fact, some market watchers are still rather bullish on the German car giant in spite of the emissions scandal that is threatening the entire industry.

CNBC highlights the good feeling around the German firm as it tackles an investigation that is spreading across the globe.

It's not a bank

VW scandal: $7.3B profit warning but damage could hit Germany

Tom Elliott, international investment strategist at DeVere Group, told CNBC Tuesday that it's not likely that Volkswagen will be subjected to an "orgy" of political and media pressure, adding he'd be "sorely tempted" to buy the stock at this price.

"If the net widens, and other companies come in, I suspect the pressure on each individual...would be less. Cars do not excite the same amount of anger as banks do," he said.

It's cheap

A trader at the stock exchange in Frankfurt, Germany, Monday June 29, 2015.
Getty Images

It currently has a price-to-earnings ratio of 5.7, which is an important metric used by equity analysts to gauge how expensive a stock is. The current average for the German DAX is 14.75.

"Despite near term concerns we remain positive on VW as it is one of very few OEMs (original equipment manufacturers) whose earnings are meaningfully below potential," UBS analyst Philippe Houchois, said in a note Tuesday.

The Swiss bank has a "buy" rating on the stock but has downgraded its target price to 290 euros ($322.50). It closed Tuesday at 106 euros.

Its lack of exposure

It might have admitted fixing diesel vehicle emissions tests but it's less exposed to the technology than its peers.

JPMorgan auto analyst Jose Asumendi calculated Tuesday that globally VW had 25 percent of engines exposed to diesel technology. BMW and Daimler have 35 percent and 45 percent, he added, with Peugeot having 40 percent.

...but buyer beware

A Volkswagen Passat is offered for sale at a dealership on Sept. 18, 2015, in Chicago. The Environmental Protection Agency has accused Volkswagen of installing software on nearly 500,000 diesel cars in the U.S. to evade federal emission regulations.
VW scandal could keep it from reaching No. 1

Before its profit warning on Tuesday morning, the stock still had five "strong buy" recommendations from analysts and eight "buy" recommendations. However, a series of downgrades meant this was significantly down from the recommendations a month ago.

Deutsche Bank's Tim Rokossa confirmed in a note Tuesday that the stock would react "materially negatively" on recent newsflow.

"It looks to put up another very challenging case on VW's shoulders in an already rough time of significant change and falling demand in major regions," he said.