Based on my research, here's a brief fundamental analysis and DCF valuation of Porsche Automobil Holding SE (PAH3):
Fundamental Analysis
Business Model: Porsche SE is a holding company that owns 52.2% of Volkswagen AG (including 12 brands: Audi, Bentley, Bugatti, Ducati, Lamborghini, MAN, Porsche, Scania, SEAT, ŠKODA, Volkswagen Commercial Vehicles and Volkswagen Passenger Cars) and has investments in mobility and industrial technology
2024 Financial Performance:
- Profit after tax: €2.51 billion (9M 2024), down 34% YoY from €3.8 billion
- 2024 full-year profit forecast: €2.4-4.4 billion range
- Net debt projected: €5.0-5.5 billion by year-end 2024
- 2024 dividend: €1.910 per preferred share, €1.904 per ordinary share
Key Challenges:
- Expected significant non-cash impairment losses on VW and Porsche AG investments for 2024, making group result after tax significantly negative Trading at 29.8% discount to NAV
- Heavy reliance on dividends from VW and Porsche AG for debt servicing
DCF Valuation
Current Market Data:
- Current stock price: €36.77 (as of April 28, 2025)
- Analyst average price target: €45.78 (range: €35-78)
DCF Analysis: PAH3's DCF value cannot be reliably calculated due to the holding company structure and irregular cash flow patterns.
However, alternative valuation approaches suggest:
- Intrinsic value estimate: $6.849 USD (€6.40 approx.) - shows 26% undervaluation based on multiples-only approach
- Analyst consensus implies 31.74% upside potential to €45.78
Investment Thesis:
- Strengths: Exposure to leading automotive brands, solid dividend history, trading at discount to NAV
- Risks: High leverage (€5.3B net debt), impairment charges, dependence on underlying holdings' performance
Conclusion: PAH3 appears undervalued at current levels, but traditional DCF valuation is challenging due to its holding company structure. The discount to NAV and analyst targets suggest potential upside, though risks around VW's performance and debt levels remain key concerns.
Fair value range: €40-46 based on analyst consensus and NAV discount analysis.
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Disclaimer
The user StefanoF holds no position in XTRA:PAH3. Simply Wall St has no position in any of the companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.