German automobile giant Porsche Automobil Holding SE (DE:PAH3) or Porsche SE lowered its revenue forecast for 2024, citing supply chain issues for its aluminium parts. As a result, the company now expects sales revenue to be between €39 billion and €40 billion, down from the previous estimate of €40 billion and €42 billion. Additionally, it reduced its operating return on sales outlook to 14%-15% from 15%-17%.
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Porsche is known for its luxury and high-performance cars. Porsche SE holds long-term core investments in Volkswagen AG (DE:VOW) and Porsche AG. Meanwhile, Volkswagen owns over 75% of Porsche AG’s subscribed capital.
Porsche Hit by Supply Issues
Porsche’s supply issues are primarily due to the flooding of a production facility at a major European supplier, leading to a shortage of aluminium components. This has impacted production across all Porsche car series and may lead to a potential shutdown of one or more vehicle lines.
The company further indicated that the production and delivery delays are unlikely to be fully mitigated throughout the rest of the year.
Earlier this month, Porsche announced its key numbers for the first half of 2024. The company’s global vehicle deliveries fell by 7% compared to the same period in 2023, largely due to a 33% year-on-year decline in China. On the other hand, the company registered a 22% growth in deliveries in its home market, Germany.
Porsche Scales Back EV Targets
The revenue forecast came after Porsche’s recent announcement about reducing its EV (electric vehicle) goals. Yesterday, the company stated that the shift to EVs will take longer than previously expected. Porsche had aimed for 80% of its sales to be all-electric by 2030. However, this goal has now been adjusted and will depend on customer demand and progress in electromobility.
The company also highlighted varying levels of EV adoption in its major markets: strong demand in China, slower uptake in Europe, and inconsistent growth in the U.S.
Is Porsche a Good Stock to Buy?
According to TipRanks’ consensus, PAH3 stock has received a Moderate Buy rating based on recommendations from four analysts. This includes two Buy and two Hold ratings. The Porsche share price forecast is €72.25, which indicates 68.4% upside potential. Shares have declined about 17% over the past year.
