Reminder: Markets will be closed on Monday, February 20 for President's Day Holiday
Why Porsche’s Stock Can Keep Speeding Higher
Many may dream of having a Porsche sports car in the garage, but owning the company’s stock could be just as rewarding.
Shares of Porsche (ticker: P911.Germany), maker of the iconic 911 that has resembled a futuristic spaceship since it made its debut in 1964, only recently came back on the market. Porsche was spun off by Volkswagen last year, and its stock has since risen 40%.
The reason it has sped higher is because it trades more like a luxury good than a traditional car maker. Porsche trades at 20.6 times earnings. Volkswagen (VOW.Germany), the company with which it has deep business and historical ties, trades at 5.7 times earnings. Ford Motor (F) is at 8.8 times.
It isn’t unheard of for a car company to masquerade as something else on the stock market. Tesla (TSLA) famously trades somewhat like a technology company, at 47 times earnings, as investors bet that being the leader in electric vehicles will pay off in the future.
Porsche—and, for that matter, Italian rival Ferrari—are more like luxury-goods company LVMH Moët Hennessy Louis Vuitton (MC.France), which makes pristine leather bags, perfume, and Champagne and trades at 25 times earnings.
What they have in common is that they sell things that are highly desirable to wealthy people for whom price is no object. That means margins can be generous.
Porsche is also helped by the ability to keep costs down through its deep ties with VW. They share production facilities and cooperate to continually improve batteries. Porsche aims to make 80% of its cars electric by 2030.
Porsche stands out “by virtue of its somewhat unique profile at the crossroads between the premium and luxury segments,” say Oddo BHF analysts led by Anthony Dick. This allows it to “capitalize on the robust demand and richer margins found at the high end, while enjoying the scale required to smoothly finance the technological shift affecting the sector.”
Porsche, based in Stuttgart in southwest Germany, employs about 37,000 people and has a market capitalization of 102 billion euros ($109 billion). In addition to the classic 911, it also makes the Cayenne SUV, the Taycan electric vehicle, and several other models.
The company is valued at a significant premium to its peers, according to FactSet. Shares have risen 20.7% this year to €114.40. Its average target price is €123.71. Six analysts rate the stock a Buy and six rate it a Hold.
VW and Porsche go way back. Ferdinand Porsche, founder of his namesake company, designed the Beetle in 1938. His grandson would later become CEO of VW in 1993.
In the first decade of this century, the two companies engaged in a bitter boardroom battle as the much smaller Porsche tried to leverage its premium valuation to buy VW, only to see the effort backfire as the market turned; VW bought Porsche instead. In 2012, VW bought the last of Porsche’s shares outstanding and took the company private.
After a few years of impressive production growth, VW in October floated 25% of Porsche on the stock market, with a debut price of €82.50. Juergen Pieper, at Metzler Capital Markets, is one of the analysts who thinks the shares can go higher, giving them a medium-term price target of €130.
Closing Stock Market SummaryThe stock market opened decidedly weak, carrying over yesterday's downside momentum, as investors looked to take some money off the table after a big run recently. Concerns about the Fed raising rates higher than expected for longer than expected also contributed to the early weakness.
Those concerns were stoked again today by Fed Governor Michelle Bowman (FOMC voter) saying that rate hikes should continue until there is "a lot more" progress on inflation, according to Reuters.
The general tone started to shift, however, as market rates backed down from overnight highs. The 2-yr note yield, which hit 4.71% overnight, settled the session down two basis points to 4.61%. The 10-yr note yield, which hit 3.92% overnight, also fell two basis points today to 3.83%.
Ultimately, the main indices closed the session near their best levels of the day, which had the Dow Jones Industrial Average and Russell 2000 sporting slim gains. The S&P 500 and Nasdaq had their upside moves limited somewhat by downside pressure from the mega cap space. The Vanguard Mega Cap Growth ETF (MGK) closed down 0.9% versus a 0.2% loss in the Invesco S&P 500 Equal Weight ETF (RSP) and a 0.3% loss in the S&P 500.
Market internals reflected the shift in sentiment today. Shortly after the open, decliners led advancers by a greater than 3-to-1 margin at the NYSE and a greater than 2-to-1 margin at the Nasdaq. By the close, decliners led advancers by a 4-to-3 margin at the NYSE while advancers had a slim lead over decliners at the Nasdaq.
Roughly half of the 11 S&P 500 sectors logged a gain this session led by the defensive-oriented consumer staples (+1.3%), utilities (+1.0%), and health care (+0.9%). Meanwhile, the energy (-3.7%) sector was the worst performer by a wide margin amid falling oil prices ($76.57/bbl, -1.91, -2.4%).
- Nasdaq Composite: +12.6% YTD
- Russell 2000: +10.5% YTD
- S&P Midcap 400: +9.7% YTD
- S&P 500: +6.2% YTD
- Dow Jones Industrial Average: +2.1% YTD
Reviewing today's economic data:
- January Import prices -0.2%; Prior was revised to -0.1% from 0.4%
- January Import Prices ex-oil 0.3%; Prior 0.4%
- January Export Prices 0.8%; Prior was revised to -3.2% from -2.6%
- January Export Prices ex-ag. 0.8%; Prior was revised to -3.3% from -2.7%
- January Leading Indicators -0.3% (consensus -0.3%); Prior was revised to -0.8% from -1.0%
As a reminder, bond and equity markets will be closed on Monday for Presidents Day.
Looking ahead to Tuesday, market participants will receive the following economic data:
- 9:45 a.m. ET: Preliminary February IHS Markit Manufacturing PMI (prior 46.9) and preliminary IHS Markit Services PMI (prior 46.8)
- 10:00 a.m. ET: January Existing Home Sales (prior 4.02 mln)
>>> Up
* Apetit Raised to Accumulate at Inderes; PT 12 euros
* Banco BPM Raised to Outperform at KBW; PT 5.81 euros
* BPER Banca Raised to Outperform at KBW; PT 3.85 euros
* Credito Emiliano Raised to Outperform at KBW; PT 10.69 euros
* Dunelm Raised to Buy at Investec; PT 1,300 pence (+)
* Elmos Semiconductor Raised to Buy at Hauck & Aufhaeuser (+)
* Eezy Raised to Accumulate at Inderes; PT 3.70 euros
* Intesa Sanpaolo Raised to Outperform at KBW; PT 3.43 euros
* Kerry Group Raised to Neutral at Goldman; PT 93 euros
* Kuehne + Nagel Raised to Overweight at JPMorgan
* Kuehne + Nagel Raised to Overweight at JPMorgan
* Signup Software Raised to Buy at Pareto Securities; PT 95 kronor (+)
* Standard Chartered PT Raised to 1,000 pence at Berenberg
* Stillfront Raised to Buy at Pareto Securities; PT 24 kronor (+)
* Taaleri Raised to Reduce at Inderes; PT 11 euros
* ZIM Integrated Shipping Raised to Overweight at JPMorgan
>>> Down
>>> Down
* Airbnb Cut to Accumulate at Phillip Secs; PT $149 (+)
* Assura Cut to Hold at Numis; PT 58 pence
* Barrick Gold Cut to Reduce at Veritas Investment Research Co
* Barrick Gold Cut to Reduce at Veritas Investment Research Co
* British Land Cut to Add at Numis; PT 530 pence
* Capital & Counties Cut to Add at Numis; PT 140 pence
* Catena Media Cut to Hold at ABG; PT 35 kronor
* Derwent London Cut to Add at Numis; PT 3,050 pence
* Deutsche Post Cut to Underweight at JPMorgan; PT 31.50 euros
* Direct Line Cut to Sector Perform at RBC; PT 190 pence
* Fortnox Cut to Hold at ABG; PT 65 kronor
* GEA Group Cut to Underweight at Barclays; PT 38 euros
* Grieg Seafood Cut to Hold at Arctic Securities; PT 90 kroner
* Hammerson Cut to Add at Numis; PT 34 pence
* Instalco AB Cut to Hold at ABG; PT 55 kronor
* Land Sec. Cut to Add at Numis; PT 800 pence
* Link Mobility Group Holding Cut to Hold at Handelsbanken
* LondonMetric Cut to Add at Numis; PT 230 pence
* Mediobanca Cut to Underperform at KBW; PT 11.15 euros
* Oriola Cut to Reduce at Inderes; PT 1.70 euros (+)
* Primary Health Cut to Hold at Numis; PT 120 pence
* QT Group Cut to Reduce at Inderes; PT 72 euros
* QT Group Cut to Hold at Nordea (+)
* Randstad Cut to Equal-Weight at Barclays; PT 62.50 euros
* Recordati Cut to Underweight at Barclays; PT 35 euros
* Scandic Cut to Hold at Deutsche Bank; PT 37.40 kronor
* Sinch Cut to Hold at Handelsbanken
* Supermarket Income Cut to Sell at Liberum; PT 90 pence
* Titanium Cut to Accumulate at Inderes; PT 19 euros
* UmweltBank Cut to Add at AlphaValue/Baader
>>> Initiation
>>> Initiation
* Brown-Forman Rated New Sell at Citi; PT $62
* Cinis Fertilizer Rated New Buy at ABG; PT 60 kronor
* Clorox Rated New Neutral at Citi; PT $155
* Clorox Rated New Neutral at Citi; PT $155
* Coca-Cola Rated New Buy at Citi; PT $68
* Colgate-Palmolive Rated New Buy at Citi; PT $84
* Constellation Brands Rated New Buy at Citi; PT $265
* Coty Rated New Neutral at Citi
* Estee Lauder Rated New Buy at Citi; PT $295
* Glanbia Reinstated Neutral at Credit Suisse; PT 11.80 euros
* Keurig Dr Pepper Rated New Neutral at Citi; PT $37
* Monster Beverage Rated New Buy at Citi; PT $121
* Newell Brands Rated New Neutral at Citi; PT $15
* PepsiCo Rated New Neutral at Citi; PT $180
* P&G Rated New Buy at Citi; PT $160
* Stolt-Nielsen Rated New Buy at Nordea
>>> Call
>>> Call
* Barclays Sees Margin Pressures for EU Capital Goods, Cuts GEA (+)
* Direct Line Faces Dividend Reset in 2023, RBC Cuts Rating
* Direct Line Faces Dividend Reset in 2023, RBC Cuts Rating
* Kerry Raised to Neutral at Goldman With Downside Looking Limited (+)
- Mercedes (MBG TH) +1.9%
- Mercedes Sees Lower Earnings, Plans €4 Billion Buyback
- TUI (TUI1 TH) -1.6%
- Germany’s Biggest Airports Hit by Staff Walkouts Over Pay
- K+S (SDF TH) -1.7%
- Thyssenkrupp (TKA TH) -1.7%
- Thyssenkrupp Reader Interest Increases
- Adyen (1N8 TH) -1.8%
- Nemetschek (NEM TH) -1.8%
- HelloFresh (HFG TH) -2%
- Watch Europe Food Delivery Stocks as DoorDash Sees Profit Growth
- Nel (D7G TH) -2%
- GTT (9TG TH) -2.2%
- Deutsche Post (DPW TH) -3%
- Deutsche Post Cut to Underweight at JPMorgan; PT 31.50 euros
- GEA Group (G1A TH) -3.7%
- GEA Group Cut to Underweight at Barclays; PT 38 euros
DAX:
- Mercedes (MBG TH) +1.8%
- *MERCEDES SEES 2023 EBIT SLIGHTLY BELOW PRIOR-YEAR LEVEL
- BASF (BAS TH) -1.1%
- Siemens Energy (ENR TH) -1.2%
- Zalando (ZAL TH) -1.4%
- Infineon (IFX TH) -1.5%
- Deutsche Post (DPW TH) -2.8%
- Deutsche Post Cut to Underweight at JPMorgan; PT 31.50 euros
MDAX:
- United Internet (UTDI TH) -1.6%
- Aurubis (NDA TH) -1.8%
- Nemetschek (NEM TH) -1.8%
- HelloFresh (HFG TH) -2%
- Watch Europe Food Delivery Stocks as DoorDash Sees Profit Growth
- GEA Group (G1A TH) -3.2%
- GEA Group Cut to Underweight at Barclays; PT 38 euros
SDAX:
- 1&1 (DRI TH) +0.7%
- KWS Saat (KWS TH) +0.6%
- SAF-Holland SE (SFQ TH) -0.8%
- Shop Apotheke (SAE TH) -1%
- SGL (SGL TH) -1.1%
- Grenke (GLJ TH) -1.7%
- Nordex (NDX1 TH) -1.7%
Stocks in Asia dropped alongside US equity futures with expectations on steeper US rate hikes growing after comments by two Federal Reserve officials. The dollar rallied. An Asian stock benchmark was set for a third straight weekly decline, the worst such run of losses since October. Contracts for both the S&P 500 and Nasdaq 100 were down after the underlying indexes sank more than 1% on Thursday. The Bloomberg dollar gauge rose as much as 0.4%, erasing its losses for the year, while benchmark Treasury yields climbed for a fourth day. The yields on two-year and 10-year Treasuries both set 2023 highs this week. Data on Thursday showed that US producer prices rebounded in January by the most since June. Investors have been upping their bets on how far the Fed will raise rates this tightening cycle. They now see the federal funds rate climbing past 5.2% in July, according to trading in the US money markets. That compares with a perceived peak rate of 4.9% just two weeks ago. In China, the central bank added the biggest amount of cash on record into the banking system to avoid a liquidity squeeze. Earlier, the government was said to be selecting regulatory veterans known for their strict campaigns against financial wrongdoing as the new chiefs of the country’s banking and securities watchdogs. In China, the central bank added the biggest amount of cash on record into the banking system to avoid a liquidity squeeze. Earlier, the government was said to be selecting regulatory veterans known for their strict campaigns against financial wrongdoing as the new chiefs of the country’s banking and securities watchdogs. Bitcoin retreated after three days of gains that were fueled by easing fears of a US regulatory crackdown.
oil headed for a weekly drop as rising US inventories and the prospect of further tightening by the Federal Reserve eclipsed the lift from more signs that Chinese energy demand is improving. Gold fell. US After Hours Busy earnings night; DASH +5.9%, DKNG +5.6%, AMAT +1.4% higher on earnings; AMN -9.7%, CGNX -8.1%, BIO -8%, TXRH -4.9% lower on earnings; OTTR +7.4% as it will join S&P SmallCap 600.
Nikkei -0.64% Hang Seng -0.58% CSI -0.48% Shanghai -0.16% Shenzen -0.61%
Eur$ 1.0639 CNH 6.8884 CNY 6.8775 JPY 134.71 GBP 1.1950 CHF 0.9291 RUB 74.8100 TRY 18.8621 WTI$ 77.61 -1.12% Gold 1,826.74 -0.53% BTC 23,750 -2.20% ETH 1,657 -1.52%
S&P -0.52% Nasdaq -0.74% EuroStoxx -0.88% FTSE -0.28% Dax -0.73% SMI -0.42%
Macro :
Macro :
- Putin’s War to Lop $190 Billion Off Economy in Delayed Reckoning
- Biden Doctors Say He’s ‘Fit For Duty’ Ahead of Expected 2024 Bid
- Biden Doctors Say He’s ‘Fit For Duty’ Ahead of Expected 2024 Bid
- Fed Hawks See Possible Case for Returning to Larger Rate Hikes
- China’s Top Tech Banker Goes Missing, Unnerving Finance Industry
- Wealthy Brits Are Reviving the Offset Mortgage to Lower Bills
Keep an eye on :
Keep an eye on :
- AIR FP : Boeing to Fold Jet-Financing Arm Into Its Commercial Division
- AF FP : Air France-KLM 4Q Net Income Beats Estimates
- AF FP : Air France’s €1.4 Billion Covid-19 Aid From France Gets EU Nod
- AKER NO : Aker 4Q Net Asset Value per Share NOK900 Vs. NOK929 Q/Q
- AKTIA FH : Aktia Bank 4Q Net Interest Income EU24.2M
- ALV GY : Allianz FY Operating Profit Beats Estimates
- ALV GY : Allianz Raises Dividend to Lure Shareholders After Fund Collapse
- AAPL US : Apple Has Begun Cutting Contractor Workforce: New York Post
- BRNL NA : Brunel FY Ebit Beats Estimates
- CTY1S FH : Citycon Sees 2023 EPRA EPS EU0.69 to EU0.81
- COFA FP : Coface FY Net Income Beats Estimates
- CSGN SW : Credit Suisse Singapore CEO Exits in Latest Asia Departure
- GLJ GY : Grenke Says Hirsch Takes Over From Michael Buecker as CEO
- GTT FP : GTT 2023 Ebitda Forecast Misses Estimates
- HHFA GY : Hamburger Hafen Prelim FY Ebit Beats Estimates
- HEIJM NA : Heijmans FY Revenue Beats Estimates
- HEIA NA : Femsa Surges on $3.7 Billion Offer to Begin Heineken Exit
- HEIO NA : FEMSA to Offer About EU3.5B Heineken Shrs, Convertible Bonds
- RMS FP : Hermes 4Q Sales at Constant Exchange Rates Beats Estimates
- NK FP : Imerys FY Revenue Misses Estimates
- KOMP NO : Komplett Bank Offering of 18.2m Shares Prices at NOK5.50/Share
- LHA GY : Germany’s Biggest Airports Hit by Staff Walkouts Over Pay
- MANU US : Qatari Royals Said to Plan £5 Billion Opening Bid for Man United
- MBG GY : Mercedes 4Q Ebit Beats Estimates
- MBG GY : Mercedes Announces $4.3 Billion Share Buyback
- MRNA US : Moderna Flu Shot Gives Mixed Immune Results in Final-Stage Trial
- NBA PL : Novabase Offers to Buy Back as Much as 20% of Its Stock
- PNDX SS : Pandox Buys The Queens Hotel in Leeds for About GBP53m
- PHIA NA : Philips Respironics Recalls Certain Ventilators, FDA Says
- PIHLIS FH : Pihlajalinna 4Q Revenue Beats Estimates
- PROX BB : Proximus 4Q Adjusted Ebitda Meets Estimates
- SAF FP : Safran Sees 2023 Free Cash Flow at Least EU2.5B, Est. EU2.15B
- SIKA SW : Sika FY Ebit Meets Estimates
- SIKA SW : Sika FY Ebit Meets Estimates
- SNAP US : Snapchat App Growth Accelerates, Tops 750 Million Users a Month
- STR AV : Strabag FY Output Volume EU17.74B Vs. EU16.13B Y/y
- SREN SW : Swiss Re FY Net Income Meets Estimates
- TEP FP : Teleperformance FY Adjusted Ebita Meets Estimates
- TIT IM : *CDP MAY INCLUDE OPEN FIBER IN TEL. ITALIA GRID BID: MESSAGGERO
- TKO FP : Tikehau Gets Investment From Families Behind AB Inbev: FT
- UBI FP : Ubisoft 3Q Net Bookings Misses Estimates
- UBI FP : Ubisoft Quarterly Bookings Miss Estimates With Slowing Demand
- UN01 GY : Uniper FY Adjusted Ebit Loss EU10.9B Vs. Profit EU950M Y/y
- VLA FP : Valneva: Pfizer to Discontinue Some Participants in Lyme Trial
>>> Up
* Apetit Raised to Accumulate at Inderes; PT 12 euros
* Banco BPM Raised to Outperform at KBW; PT 5.81 euros
* BPER Banca Raised to Outperform at KBW; PT 3.85 euros
* Credito Emiliano Raised to Outperform at KBW; PT 10.69 euros
* Eezy Raised to Accumulate at Inderes; PT 3.70 euros
* Intesa Sanpaolo Raised to Outperform at KBW; PT 3.43 euros
* Kerry Group Raised to Neutral at Goldman; PT 93 euros
* Kuehne + Nagel Raised to Overweight at JPMorgan
* Kuehne + Nagel Raised to Overweight at JPMorgan
* Standard Chartered PT Raised to 1,000 pence at Berenberg
* Taaleri Raised to Reduce at Inderes; PT 11 euros
* ZIM Integrated Shipping Raised to Overweight at JPMorgan
>>> Down
>>> Down
* Assura Cut to Hold at Numis; PT 58 pence
* Barrick Gold Cut to Reduce at Veritas Investment Research Co
* Barrick Gold Cut to Reduce at Veritas Investment Research Co
* British Land Cut to Add at Numis; PT 530 pence
* Capital & Counties Cut to Add at Numis; PT 140 pence
* Catena Media Cut to Hold at ABG; PT 35 kronor
* Derwent London Cut to Add at Numis; PT 3,050 pence
* Deutsche Post Cut to Underweight at JPMorgan; PT 31.50 euros
* Direct Line Cut to Sector Perform at RBC; PT 190 pence
* Fortnox Cut to Hold at ABG; PT 65 kronor
* GEA Group Cut to Underweight at Barclays; PT 38 euros
* Grieg Seafood Cut to Hold at Arctic Securities; PT 90 kroner
* Hammerson Cut to Add at Numis; PT 34 pence
* Instalco AB Cut to Hold at ABG; PT 55 kronor
* Land Sec. Cut to Add at Numis; PT 800 pence
* Link Mobility Group Holding Cut to Hold at Handelsbanken
* LondonMetric Cut to Add at Numis; PT 230 pence
* Mediobanca Cut to Underperform at KBW; PT 11.15 euros
* Primary Health Cut to Hold at Numis; PT 120 pence
* QT Group Cut to Reduce at Inderes; PT 72 euros
* Randstad Cut to Equal-Weight at Barclays; PT 62.50 euros
* Recordati Cut to Underweight at Barclays; PT 35 euros
* Scandic Cut to Hold at Deutsche Bank; PT 37.40 kronor
* Sinch Cut to Hold at Handelsbanken
* Supermarket Income Cut to Sell at Liberum; PT 90 pence
* Titanium Cut to Accumulate at Inderes; PT 19 euros
* UmweltBank Cut to Add at AlphaValue/Baader
>>> Initiation
>>> Initiation
* Brown-Forman Rated New Sell at Citi; PT $62
* Cinis Fertilizer Rated New Buy at ABG; PT 60 kronor
* Clorox Rated New Neutral at Citi; PT $155
* Clorox Rated New Neutral at Citi; PT $155
* Coca-Cola Rated New Buy at Citi; PT $68
* Colgate-Palmolive Rated New Buy at Citi; PT $84
* Constellation Brands Rated New Buy at Citi; PT $265
* Coty Rated New Neutral at Citi
* Estee Lauder Rated New Buy at Citi; PT $295
* Glanbia Reinstated Neutral at Credit Suisse; PT 11.80 euros
* Keurig Dr Pepper Rated New Neutral at Citi; PT $37
* Monster Beverage Rated New Buy at Citi; PT $121
* Newell Brands Rated New Neutral at Citi; PT $15
* PepsiCo Rated New Neutral at Citi; PT $180
* P&G Rated New Buy at Citi; PT $160
* Stolt-Nielsen Rated New Buy at Nordea
>>> Call
* Direct Line Faces Dividend Reset in 2023, RBC Cuts Rating
>>> Call
* Direct Line Faces Dividend Reset in 2023, RBC Cuts Rating