Bernstein cuts Porsche SE target price to €35, keeps Market-Perform

Overview

This report is Bernstein's model update on Porsche Automobil Holding SE. It lowers Porsche SE's target price from €38 to €35 and keeps a Market-Perform rating. The key reason is that Porsche SE's valuation is directly affected by the value of its holdings in Volkswagen and Porsche AG, both of which saw forecast and target-price cuts after 1Q26.

Core views

Porsche SE remains a holding-company stock highly dependent on VW and P911. The company has carried elevated leverage since acquiring the Porsche AG stake in 2022/23, while Volkswagen and Porsche AG have been under pressure in a difficult auto market, leading to lower dividend income for Porsche SE and two consecutive years of lower dividends at the company level. Bernstein believes that until the two core holdings recover and support deleveraging, Porsche SE's share price is likely to remain range-bound.

Analysis framework

The report updates Volkswagen and Porsche AG forecasts, revalues the net asset value of Porsche SE's holdings, and applies a 40% holding-company discount to derive the target price. It also cross-checks earnings forecasts, net debt, dividend pressure, legal disputes, and portfolio value.

Methodology notes

• Valuation methodsSOTP/NAV valuation

  Discounted net asset value valuation of holdings

  The report uses Volkswagen and Porsche AG target prices to calculate the NAV/fair value of Porsche SE's core holdings, then subtracts net debt and applies a 40% holding-company discount to derive €10.6bn of equity value and a €35 target price.

• Forecast updateEarnings forecast revision

  Adjust Porsche SE earnings based on core-holding forecasts

  Porsche SE's profit mainly comes from equity-accounted earnings from Volkswagen and Porsche AG, so the report passes through the forecast changes for both companies after 1Q26 into Porsche SE's profit, EPS, and net debt forecasts.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• PAH3.GR

  Research coverage

  Strengths

  The valuation implies some upside, it holds core equity stakes in Volkswagen and Porsche AG, and long-term discount compression could create leverage to the share price.

  Weaknesses

  Net debt is relatively high, dividend income depends on the performance of core holdings, and the technology portfolio is too small to change the overall valuation structure.

  Comparison

  Compared with the EDME index, PAH3.GR has significantly underperformed over the year-to-date, 6-month, and 12-month horizons.

  Risks

  A decline in core-holding prices, prolonged legal disputes or adverse rulings, continued dividend cuts, and slower-than-expected deleveraging.

• Volkswagen AG

  Core holding and source of cash flow

  Strengths

  Porsche SE owns 53.3% of its ordinary shares, making it the largest source of NAV and dividend income.

  Weaknesses

  The auto sector environment is difficult, and the target price was cut from the €108-related valuation base to a €100 preferred-share target.

  Comparison

  Its stake value is about €14.2bn, far above the Porsche AG stake and the technology portfolio.

  Risks

  New negative information related to Dieselgate, a share-price decline, or dividends below expectations.

• Porsche AG

  Core holding and source of cash flow

  Strengths

  Porsche SE owns 25% plus one share of the ordinary shares, giving it an important influence on the group's long-term strategy and valuation.

  Weaknesses

  The target price was cut from €50 to €45, and lower earnings forecasts weigh on Porsche SE profit.

  Comparison

  Its stake value is about €4.7bn, below the Volkswagen stake but still materially above the technology portfolio.

  Risks

  A decline in Porsche AG's share price, insufficient earnings recovery, or dividend contributions below expectations.

Key data

• RatingMarket-PerformBernstein maintains the rating.
• Target price€35.00Previously €38.00; the cut reflects lower target prices for Volkswagen and Porsche AG.
• Current price€31.95As of 13 May 2026.
• Implied upside10%Based on the current price and the €35 target price.
• 2026 after-tax profit forecast€2.7bnWithin Porsche SE's guidance range of €1.5bn to €3.5bn.
• 2026 year-end net debt forecast€4.86bnThe company's guidance range is €4.7bn to €5.2bn.
• Holding-company discount40%The discount assumption used in the target-price valuation.
• Volkswagen stake value€14.2bnAs of 31 March 2026.
• Porsche AG stake value€4.7bnAs of 31 March 2026.
• Technology portfolio market value<€0.5bnAs of 31 March 2026, materially smaller than the core holdings.

Impact & implications

For investors, Porsche SE is in the near term more of a discounted expression of the recovery in Volkswagen and Porsche AG, dividend normalization, and easing legal risk. The target-price cut shows that revisions to upstream holding values directly affect Porsche SE's valuation; however, with 10% implied upside still left and a Market-Perform rating, the report does not present a clearly bullish or bearish conclusion.

Risks

• A decline in the value of Volkswagen ordinary shares, especially if new negative information emerges from the Dieselgate issue.
• Conflict between the Porsche and Piech major shareholders.
• Adverse court rulings related to Porsche's past attempt to acquire VW and to Dieselgate matters.
• A decline in Porsche AG's share price.
• Prolonged unresolved legal disputes, making it difficult for the 40% holding-company discount to narrow.
• Low dividends from core holdings, keeping Porsche SE's deleveraging and own dividend under pressure.

What to watch

• Future earnings forecasts, target prices, and dividend changes for Volkswagen and Porsche AG.
• Whether Porsche SE's 2026 after-tax profit falls within the €1.5bn to €3.5bn guidance range.
• Whether year-end 2026 net debt comes close to the report's forecast of €4.86bn and the company's guidance range of €4.7bn to €5.2bn.
• Progress in legal proceedings before the German Federal Court and the European Court.
• Whether Porsche SE's actual holding-company discount widens or converges from around the long-term average of roughly 33%.
• Whether the technology and growth portfolio can generate a more meaningful valuation contribution from a base of less than €0.5bn.