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Porsche stock is a Wall Street darling with 22% surge since IPO

Nov. 8, 2022 Updated Tue., Nov. 8, 2022 at 6:05 p.m.

 (Alex Kraus/Bloomberg)
(Alex Kraus/Bloomberg)
By Alexandra Muller Bloomberg

Porsche is brimming with analyst favor a little over a month after its landmark initial public offering.

Goldman Sachs, JPMorgan Chase, Citigroup and Deutsche Bank analysts rated the luxury carmaker a buy or equivalent on Tuesday, lauding its brand presence, focus on electric vehicles and resilient financial performance. They are among a slew of brokers initiating coverage on the company, which has no sell ratings so far.

“We believe Porsche offers unique exposure to the luxury automotive segment, enjoying strong pricing power, allowing the firm to face challenges” including higher inflation costs, EV transition and autonomous driving, JPMorgan analysts led by Jose M Asumendi wrote.

The company’s $9.4 billion IPO, Europe’s largest in more than a decade, injected fresh life into a listings market that has struggled amid rising inflation, hawkish central banks and the threat of global recession. The shares have surged more than 20% since the late September debut, with the company overtaking parent Volkswagen as Europe’s most valuable carmaker last month.

Analysts on average expect about another 5.1% gain in the next 12 months, based on estimates compiled by Bloomberg. JPMorgan, the biggest bull, sees the stock hitting approximately $140, implying a 40% rally.

Porsche’s “pioneering position” in luxury battery electric vehicles makes it a “desirable EV play among the incumbent carmakers,” wrote Citi analyst Martin Wilkie, who initiated the stock with a buy recommendation.

Among those with a neutral rating, BNP Paribas Exane’s Dorothee Cresswell warned that while being part of Volkswagen group offers Porsche further scale and synergies, it also brings execution risk and dependency.Still, the company is in “a unique position,” Barclays analysts wrote, as it combines luxury traits such as scarcity and strong pricing with the scale benefits of larger manufacturers.

Porsche is “already everybody’s darling,” the analysts including Henning Cosman said, initiating with an equal-weight rating.

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