Porsche AG (ETR:P911), the German luxury car maker, has been upgraded to a buy by US group Citi after what it says was a tough year for the business.
Citi adds that 2024 was always going to be difficult for Porsche with four new model launches ramping down and back up again.
Added to that has been weak China demand, falling prices of premium cars and tariff threats.
While 2024 still has potential for missteps, Citi sees scope for recovery looking ahead to 2025 and 2026.
These years will see peak new model demand and profitability with volume, mix, and pricing all improving off a very low 2024 base and more than offsetting incremental China risks.
“Secondly, Porsche's post-IPO focus on brand, pricing, and profitability over volume (as under VW) means lower volumes, lower Macan dilution, but improved pricing power, improved underlying profit margins, improved capital returns, and improved cash flow.
“We think this could help lift valuation,” said the bank which has a price target of €85 against €67.24 in the market today.