Porsche shares hit a record since Ma. What is the reason for investors' optimism?

Shares in sportscar maker Porsche rose to their highest since Ma after the company reaffirmed its full-year forecast and reported third-quarter results. Chief Financial Officer Jochen Breckner said 2025 would be the "bottom point" for the company, with profits turning to recovery as early as next year. Investors and analysts are pinning their hopes on CEO Michael Leiters, who is expected to take over in the near future and implement the company's new strategy.

Shares in German sportscar maker Porsche rose 6.6% in Frankfurt trading, to their highest since Ma, after the company on Friday, October 24, reaffirmed its full-year outlook and reported third-quarter results. At the time of writing, the stock was up 2%.

The company reported an adjusted operating loss for the third quarter of €966 million ($1.1 billion), which was less than market expectations and supported investor optimism. Analysts at Jefferies had forecast an even larger loss of €1.09 billion, Reuters notes. Earlier, RBC experts said that such results could support Porsche share prices.

The main reason for the losses is the costs associated with the suspension of the expansion of electric car production, which Porsche announced in September. The company faced a sharp decline in demand in China, increased price competition and the impact of import duties in the United States. The problems affected all three of the brand's key regions - Europe, North America and China. Poor financial results and a decline in capitalization led to Porsche shares dropping out of the DAX index.

CFO Jochen Breckner said 2025 would be the "bottom point" for the company, with earnings recovery expected in 2026.

Porsche and the market have high hopes for new CEO Michael Leiters, the former head of British automaker McLaren, Bloomberg writes.

"Porsche still has a long way to go to regain investor confidence," Bernstein analyst Steven Reitman said in comments to the agency. - We wouldn't be surprised if the new CEO takes additional measures. The best time for decisive action is at the start of his tenure."

According to Citi analysts, with a new growth strategy, including one based on internal combustion engine vehicles, Porsche could show margin growth for three to four years starting in 2026, The Wall Street Journal reported.

The consensus view of analysts regarding the company is rather neutral. Of the 19 analysts who track its securities, the majority - 11 - advise to keep them in the portfolio, follows from the data of MarketScreener. Four recommend buying and the same number recommend selling.

This article was AI-translated and verified by a human editor