QPD In Action – 3Q24

QPD In Action – 3Q24

This quarter we feature a high revving luxury automaker.

Porsche AG (P911 GR | DRPRY)

German automobile manufacturer specializing in luxury, high-performance sports cars, SUVs, and sedans. 

Key Facts

  • Porsche is a luxury car original equipment manufacturer (OEM) with scale. 300k+ units annual production vs 11k units at Ferrari
  • The luxury car market is small (<0.1% of global car volumes), profitable (>5% of global car profits), and growing (>6% CAGR)
  • Porsche benefits as a Volkswagen Group subsidiary – economies of scale from shared platforms and technology (R&D, production, procurement, logistics, and IT cost savings)

Why We Like Porsche

  • Near term volume growth driven by new vehicle launches (911, e-Macan, Panamera, and Taycan) over the next twelve months.

 

QUALITY

PRICE

DISCIPLINE
  • History of maintaining a strong balance sheet.
  • 10% topline CAGR since 2012 and EBIT margin of 15-18%.
  • Over the last 20 years, Porsche has increased volume 6x, mainly driven by model expansion.
  • At purchase, Porsche stock price was trading below IPO levels
  • Stock has derated from peak P/E multiple of 20x in 2022 to 11.5x (time of purchase).

 
  • 2024 remains a transition year with potential earnings downgrade, but favorable risk/reward over the medium term.

 

SECURITY FOUND IN FOLLOWING PORTFOLIO(s): Europe Select, International Equity ADR, & International Equity Fund
SPONSORING ANALYST: Di Zhou

 

 

Disclosures

Certain information contained in this communication constitutes “forward-looking statements”, which are based on Cambiar’s beliefs, as well as certain assumptions concerning future events, using information currently available to Cambiar.  Due to market risk and uncertainties, actual events, results or performance may differ materially from that reflected or contemplated in such forward-looking statements. The information provided is not intended to be, and should not be construed as, investment, legal or tax advice.  Nothing contained herein should be construed as a recommendation or endorsement to buy or sell any security, investment or portfolio allocation.  Securities highlighted or discussed have been selected to illustrate Cambiar’s investment approach and/or market outlook and are not intended to represent the performance or be an indicator for how the accounts have performed or may perform in the future. The portfolios are actively managed and securities discussed may or may not be held in client portfolios at any given time.

Any characteristics included are for illustrative purposes and accordingly, no assumptions or comparisons should be made based upon these ratios. Statistics/charts may be based upon third-party sources that are deemed to be reliable; however, Cambiar does not guarantee its accuracy or completeness.  Past performance is no indication of future results.  All material is provided for informational purposes only, and there is no guarantee that the opinions expressed herein will be valid beyond the date of this communication.

Source: Cambiar Analysis & Porsche AG company disclosure