Porsche AG downgraded by HSBC from « Buy » to « Keep »


The prospect of an IPO of Porsche AG (PAG) makes HSBC wary. The broker downgraded the luxury carmaker from « Buy » to « Hold » by lowering its price target by 233,188 euros. He wonders about the intrinsic enterprise value of Porsche AG, a legitimate question before a stock market launch. HSBC has calculated that it oscillates between 44.5 and 56.9 billion euros, below the 60 to 85 billion euros mentioned in the press.

« Our valuation of PAG, combined with the value of the group’s financial holdings, Chinese JV, FinCo and net cash, suggests that the rest of the Volkswagen Group’s automotive business is valued near zero. We suspect that the assets of the group are heavily discounted given its conglomerate structure », analyzes the broker.

According to him, the IPO could provide the market with a benchmark to reduce this discount. (…) For most investors, the question is whether PAG will be free to chart its own course, given the interconnected nature of its shareholding structure with that of Volkswagen, and the fact that they share the same CEO.

Recall that through Porsche SE, the founding families Porsche and Piech are the main shareholders of the Volkswagen Group of Wolfsburg, of which Porsche AG is a subsidiary.

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