Editor's Note: This analysis was originally published as a stock note by Morningstar Equity Research.
Key Morningstar Metrics for Porsche
- Fair Value Estimate: EUR 64.00
- Morningstar Rating: ★★★★
- Morningstar Economic Moat Rating: Narrow
- Morningstar Uncertainty Rating: High
With clarification on US import tariffs affecting European automakers, which have relatively low exposure to US exports, we update our fair value estimates to reflect the tariff implications. We also revise our long-term growth assumptions for European automakers in China.
Why it matters: We have reduced our fair value estimate for Porsche P911 by 11% to EUR 64 per share. Porsche imports 100% of vehicles sold in the US from Europe and Malaysia. It is therefore affected by the 25% worldwide tariff on imported autos into the US, as announced on March 26.
• We equally weight three scenarios: the 25% auto tariff remains in place until the end of 2025, until the end of 2026, and indefinitely. The first scenario reduces Porsche’s fair value estimates by low-single digits, while the final scenario reduces the estimate by the high teens.
• We find high loyalty rates for domestic car brands among major car manufacturing nations, most notably in Asian countries. 68% of China’s vehicle sales are domestic brands. We think this can increase to 80%, with the foreign manufacturers seeing larger market share losses in the earlier years.
The bottom line: Despite the downward revisions, Porsche continues to trade at a deep discount. We believe the discount will remain over the near term, given the heightened uncertainty around how it will adjust operations in response to tariffs.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar's editorial policies.
