Porsche shares climbed 2.5% following a UBS report that singled out the automaker as the best clean performer for the second quarter among the bank's coverage. UBS expects Porsche to deliver a reported operating margin of 7.3% in Q2, a figure that factors in roughly €250 million of strategic realignment costs. On an adjusted basis - excluding those realignment costs - the bank sees Porsche's operating margin close to 10%.
UBS projects a positive sequential trend in operating profit for the quarter, driven by a stronger product mix. The bank highlighted robust 911 sales alongside weaker 718 volumes as contributors to that mix shift. Wholesale activity is also expected to improve quarter-over-quarter after several quarters of dealer destocking, supporting the sequential profit dynamic.
The bank cautioned that further right-sizing actions could prompt an additional charge in Q2. UBS noted that the company’s CEO confirmed at the annual general meeting that discussions with labor representatives about potential further headcount reductions remain ongoing. UBS said any additional charges from these measures should stay within the low-to-mid three digit million euro range.
On cash generation, UBS expects automotive free cash flow of approximately €0.5 billion in the second quarter, attributing the outlook to disciplined investment and continued cash conversion. The bank also anticipates Porsche will reaffirm its fiscal 2026 guidance range: €35-36 billion in revenues, a 5.5-7.5% operating margin, and a 3-5% automotive free cash flow margin. UBS sees the first half of the fiscal year tracking toward the upper end of that operating margin corridor.
Looking further out, UBS projects a return to a 13% operating margin by 2030, up from an expected 7% in 2026. The bank attributes that improvement to new products and a better sales mix, cost savings, and the expected non-repeat of strategic realignment costs. UBS expects the company’s capital markets day on October 7 to offer enhanced visibility on the pathway back to double-digit margins.
Porsche is scheduled to release its second-quarter results on July 29.
About this report
The analysis reflects UBS's published expectations and related company disclosures referenced in the bank’s note.