Porsche's stock climbs as luxury brand touts dividend hike, model launches

By Barbara Kollmeyer

A previous version of this report made an incorrect reference to Porsche Automobil Holding SE. The story has been corrected.

Shares of Porsche AG rose Tuesday after the German luxury carmaker forecast a tougher 2024, but also declared a dividend.

Annual sales for the German premium sports-car maker (XE:P911) rose 7.7% to EUR40.5 billion and it reported an operating profit of EUR7.3 billion, a gain of 7.6%. Those numbers both beat Visible Alpha consensus of EUR40.29 and EUR7.23 billion, respectively.

But Porsche also warned that it expects operating return on sales to fall to between 15% and 17% in 2024, following a return of 18% in 2023.

Part of that comes as the automaker plans several car launches this year - the Panamera, Macan, Taycan and 911 models. Oliver Blume, chairman of the executive board flagged 2024 as "a year of product launches" for the company, saying that would surpass anything it has done before.

"We will be introducing a variety of exhilarating sports cars to the road, they will delight our customers around the world," said Blume.

The company had total auto deliveries of 320,221 in 2023, a gain of 3.3% over 2022.

Porsche also said it would offer a dividend of EUR2.30 an ordinary share versus EUR1 last year. Shares of Porsche rose 4% on Tuesday, even as analysts expressed some concern at the lower guidance.

"Porsche highlighted increased new model launch costs, higher depreciation charges, and a weaker global economy. We see the guide as leading to 5% consensus downgrades, after previous downgrades in December," said a team of Citi analysts led by Harald Hendrikse, who rate the automaker neutral.

Hendrikse and his team said the Porsche "transformation will take time," because the company's product range needed to be renewed.

"This is now happening - but the full impact on pricing and profitability will take time, and now come from a lower base. FY25E should be a better year with all the products available, but obviously FY25E EPS [earnings per share] will also likely now be lower. While there could be a potential buying opportunity later in FY24, we think many investors will await for improved sales and earnings momentum," said the Citi analysts.

-Barbara Kollmeyer

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03-15-24 0417ET

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