The private bank Berenberg has downgraded Porsche AG from “Buy” to “Hold” after a change in analysts and lowered the price target from 125 to 117 euros.
The demand for luxury remains robust but still cyclical, wrote the analyst Romain Gourvil, who is now responsible for Porsche, in a study available on Friday. The expert currently prefers Mercedes-Benz shares to Zuffenhausen shares for valuation reasons and in view of what will probably be a somewhat unstable second half of the year.
Berenberg raises Volkswagen’s assets to “Buy” – target lowered
The private bank Berenberg has upgraded Volkswagen from “Hold” to “Buy”, but lowered the price target from 145 to 130 euros. The opportunity/risk profile is now more attractive, wrote analyst Romain Gourvil in a study available on Friday. The securities are trading at a cyclical low and short-term risks are sufficiently priced in. In the auto sector, supply chain risks eased, but demand concerns took center stage. The expert revised his assumptions for manufacturers downwards by 2025, citing economic concerns and price-mix erosion caused by competition.
Buy recommendation for VW falls flat in a weak market environment
However, this did not help VW’s share price rise for long in a generally weak market and sector environment.
The profile of opportunities and risks at Volkswagen is now more attractive, wrote the analyst Romain Gourvil, who is now responsible for many car stocks, in his study. With this positive opinion, Gourvil somewhat counters what UBS expert Patrick Hummel said a week ago. He had made a sales recommendation for VW products and justified this primarily with his concern about greater competition from China.
The decline in VW shares had recently further confirmed Hummel’s opinion and it didn’t want to end this Friday either. The VW price is gradually approaching the 100 euro mark and then the low from the Corona crash in 2020. At just under 80 euros, the shares had collapsed to their lowest level since 2010. On Friday, after a friendly start, they fell by one percent to 104.74 euros.
In general, Gourvil says of the industry that while supply chain risks are easing, demand concerns and the threat of margin pressure are now coming into play. Because of the associated risks for profit development in 2024, a tactical approach to stock selection is appropriate. He now favors relatively low-rated companies with potential for optimization on their own or the prospect of making a strategic turnaround.
Gourvil is taking an opportunistic approach to VW and Porsche: While one stock is valued at a cycle low, the other offers little room for improvement. Based on the price-earnings ratio, he shows that the valuation of Porsche AG is much closer to the valuation of a luxury goods group than the securities of its competitor Mercedes-Benz Group. He therefore remains at “Buy” for the Stuttgart team.
On Friday, car manufacturer prices were generally unable to escape the weak environment on the stock market, which was characterized by economic and interest rate concerns. The Berenberg recommendation was of no support to Porsche AG with a discount of half a percent. The Mercedes titles fell by 0.6 percent and those of BMW fell by one percent. The Munich-based company has long seen Berenberg Bank only as a holding position. Compared to Mercedes, the assessment here is also more demanding, it was said.
The decline in the sector generally continued on Friday; the Stoxx Europe 600 Automobiles & Parts has already lost almost eleven percent since the end of July. In a similar period of time, VW shares were at a discount of almost 17 percent. In mid-2021, Wolfsburg’s titles were worth more than twice as much, despite the Corona crisis that was still acute at the time.
Skoda stops production at the Kvasiny plant due to missing parts
Skoda will suspend vehicle production at the Kvasiny plant in the Czech Republic for a week from Monday. The car manufacturer, which is part of the Volkswagen Group, said components for combustion engines were missing from a supplier in Slovenia. This is affected by the floods that hit Slovenia and Carinthia at the beginning of August.
VW has sent a team to the unnamed supplier to help with the cleanup. Skoda did not provide any information on which models or production quantities were affected. “Our teams are working hard to minimize possible impacts and deliver as many cars as possible to our customers,” it said.
The Porsche share is trading temporarily unchanged at 101.15 euros in XETRA trading, while VW preferred shares rose by 0.51 percent to 106.30 euros.
HAMBURG (dpa-AFX Broker)/PRAGUE (Dow Jones)
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