Porsche Stock Performance and Future Outlook

Porsche's stock rose on Wednesday after Citi Research upgraded its outlook to "buy" from "neutral."

This upgrade reflects optimism about Porsche's performance, even with challenges expected in 2024, such as declining demand in China and high interest rates.

Citi analysts predict a turnaround for Porsche starting in 2025, driven by better sales and profitability from new model launches.

While the company faces significant declines in the Chinese market—forecasting sales to drop from 91,000 units in 2022 to 56,000 in 2024—the impact may be smaller in 2025 compared to 2024 losses.

The Macan SUV, which has declining sales, is viewed less seriously due to its lower profitability. Porsche's strategy post-IPO focuses on brand value and higher profit margins rather than volume.

Citi foresees improvements in Porsche's EBIT margin from 13.8% in 2024 to 15.4% in 2025, boosted by new high-end models and personalization options.

Citi raised the price target for Porsche to €85 from €75, anticipating better earnings growth than other European automakers.

As Porsche embraces electric vehicles and prioritizes high-margin models, analysts at Citi predict a 26% upside for the stock, despite potential risks like trade tensions with China.

In summary, Citi believes Porsche's focus on strategic growth will enhance profitability and investor sentiment moving forward.