Porsche

The group held a pre-close call yesterday and confirmed its FY24 earnings outlook, targeting a profit margin of 14-15%, driven by a strong Q4 with improved model availability, including the 911 GTS and E-Macan. If the group achieves the low end of its €39-40bn revenue guidance, it would need to generate a Q4 profit of €1.43bn and a return on sales (ROS) of 13.7% to meet a FY24 ROS of 14%. We currently estimate Porsche's FY24 margin at 13.6%, but given the optimism expressed, we are revising it slightly upward to 14%. The group also expressed confidence in meeting its FCF guidance.

But the group outlook for 2025 was way more cautious than expected. Sales in 25 are due to decline (withdrawal of the ICE Macan, supply chain issues on the 9111 and a still very difficult situation in China). The group also mentioned adverse factors (increased D&A, a higher fixed-cost base with supply chain inflation, C02 initiatives and BEV related supplier compensation) meaning that the margin will at best be flat in 2025 (and will probably drop).

We currently forecast FY25 flat sales and a slight margin increase to 14.6%. However, the company based October consensus was significantly more optimistic, projecting €41.5bn in sales and a ROS of 16.3% (Bloomberg consensus currently at €40.6bn in sales with a ROS of 15.6%). This divergence suggests a likely consensus downgrade and a negative market reaction at the market open.