Porsche: strong upside remains, Credit Suisse says

(CercleFinance.com) - Credit Suisse has confirmed its buy rating ("outperform") on the German Porsche preferential share, the family holding company controlling Volkswagen.


Although trimmed from 93 euros to 92 euros, the broker's target price still gives the share upside potential of 60%.

Analysts first note that Volkswagen's voting rights that are controlled by Porsche have risen from 52.2% to 53.1%, which means a down payment of around 400 million at 149 euros per Volkswagen share, Credit Suisse calculates. According to specialists, this reinforcement will contribute to reducing the holding discount between Volkswagen and Porsche, since Porsche's net assets thus focus on Volkswagen rather than on other assets, on which Porsche's track record is not extraordinary.

In addition, this reinforcement demonstrates the commitment of the Porsche and Piëch families towards Volkswagen, and finally, Porsche does not hide its intention to further reinforce its presnce in Volkswagen's shareholding structure.

In short, Porsche's preferential share remains Credit Suisse's favourite share amongst European car makers, in that it enables investors to play Volkswagen with a holding discount that should fall, while the divend pay-out rate is expected to increase.



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