Editor’s Note: This analysis was originally published as a stock note by Morningstar Equity Research.
Due to clarification on US import duties affecting US automakers, fair value estimates are updated to reflect the impact on tariffs as they have relatively low US export exposures. It also corrects the long-term growth assumptions of European car manufacturers in China.
Why it matters: Reduced Porsche’s fair value estimate P911 11% to 64 euros per share. Porsche imports 100% of vehicles sold in the US from Europe and Malaysia. Therefore, as announced on March 26, it will be affected by global tariffs of 25% on imported cars into the US.
• Weight three scenarios equally. The 25% auto toll is in effect until the end of 2025 and indefinitely until the end of 2026. In the first scenario, Porsche’s fair value estimate decreases in the low single digits, while the final scenario reduces estimates by older teenagers.
•In major car manufacturing countries, particularly in Asian countries, there is high loyalty of domestic car brands. 68% of Chinese vehicle sales are domestic brands. We believe this could increase to 80%, with foreign manufacturers having previously lost market share.
Conclusion: Despite the downward revision, Porsche continues to trade with deep discounts. Given the growing uncertainty about how operations will be adjusted in response to tariffs, we believe the discount will remain in the short term.
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