Porsche AG (ETR:P911) had petrol-head analysts salivating on Tuesday as several investment banks started off the sports car maker with 'buy' recommendations.
Barclays noted that the company was "already everybody's darling", after a 12.5% stake was spun out of Volkswagen Group (XETRA:VOW), at an issue price of €82.50 with a further 12.5% issued to the Porsche family vehicle (PSE). VW retained the remaining 75% of Porshe shares.
By Friday 4 November, the share price had risen to €100 with its €91bn market cap far exceeding the €79bn of VW.
"With 302k deliveries across six models in 2021, Porsche occupies a unique position, combining the luxury traits of niche carmakers, such as scarcity, high ASPs and strong pricing, with the scale benefits of larger OEMs," was the Barclays summary of its attractions.
But after the strong acceleration in the price, Barclays does not see much more, with its initial rating a neutral 'equal weight' at a target price of €106.
JPMorgan set an 'overweight' rating based on a price target of €140, with the current price around 12 times forecast 2023 earnings.
"We believe Porsche offers unique exposure to the luxury automotive segment, enjoying strong pricing power, allowing the firm to face challenges such as: a) higher inflation costs, b) EV transition, and c) autonomous driving," said analyst Jose Asumendi.
He noted that Porsche’s key product launches include the electric Macan in 2024 as well as a larger electric SUV in the medium term.
In between is Deutsche Bank, where Tim Rokossa highlighted Porsche’s "superior brand image" built on big wins in motorsports and luxury sports cars with stand-out performance and usability, and financials that have proven resilient in difficult times.
Through both price and volume growth, he said the company appears set to deliver a high-single-digit revenue compound annual growth rate as well as margin expansion, despite the increasing share of battery EVs.
"Porsche's first BEV proves that the transition to electric works without diluting brand value," he said, with the IPO giving investors "a chance to participate in a modern luxury car company with great fundamentals and yet also substantial upside from better suited pricing (in particular the Macan) and merchandising/ licensing".
He believe more share price upside exists, initiating coverage with a 'buy' rating and target price of €115.