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A double upgrade and pending job cuts snapped a three-day losing streak for Porsche (DRPRY) and drove shares up as much as 4% Wednesday.
Metzler Capital Markets analyst Daniel Schwarz assumes coverage of the German carmaker with a Buy rating from Sell previously and more than doubled his price target to €64, noting Porsche’s new CEO, Michael Leiters' effort to “transform the business into a smaller but better company.”
“We believe 2027 could be a positive catalyst: slight volume decline overcompensated by strong pricing plus benefits from cost savings and reduced one-offs. If this materialized, the market should look through 2027 and factor in the return to growth in 2028 and even higher earnings,” Schwarz writes in his note to clients.
“Porsche strictly follows ‘Value over Volume,’ and revenues and margins show this,” Schwarz adds.
“If the brand is intact and new models will be available, from 2028, very likely top-line momentum will return. If this meets a reduced cost base, a more exclusive lineup, and a strong mix, we believe earnings momentum will return.”
Shares are also getting a boost from reports that Porsche (DRPRY) plans to reduce its workforce by roughly 5K. Despite a storied brand, sales have been disappointing over the past few years as the company struggles against waning Chinese demand, import tariffs into the U.S., and a disappointing pivot to electric vehicles that fell flat with Porsche enthusiasts. However, Leiters’ efforts to trim costs and right-size the business to more realistic projections have helped stem the stock’s steady decline to an all-time low in March.
