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Investing.com -- Porsche AG (ETR:P911_p) maintained a cautious tone ahead of its second-quarter results, warning of weak wholesale volumes, a significant U.S. tariff burden, and elevated inventory levels.
In a pre-close call with investors on Wednesday, the company indicated that Q2 operating profit would be around breakeven, pressured by multiple headwinds, including a €500 million writedown on its Cellforce battery joint venture and €200 million in restructuring costs.
UBS said the call confirmed expectations for “a very soft Q2,” and now forecasts operating profit of just €30 million, with an adjusted margin of 8.2% excluding the major one-offs. Free cash flow is also seen turning negative, with UBS estimating a €250 million outflow due to higher company-held inventory and low margins.
Jefferies noted that the company’s current full-year margin guidance of 6.5–8.5% only factors in U.S. tariffs for April and May, while actual costs are likely to be higher. The analysts expect a full-year margin of 6.0%, down from a previous estimate of 6.3%.
“Confirmation, in our view, that barring U.S. tariff concessions soon, the current 6.5–8.5% guidance including only 2 months of tariffs is too high,” Jefferies analysts led by Philippe Houchois wrote.
Jefferies estimates that unit deliveries dropped 4.3% year-on-year in Q2, with sharper declines in Europe, North America, and China. It projects that wholesale volumes fell even more sharply at 15%, reflecting dealer destocking and Porsche holding back inventory ahead of potential tariff relief.
Looking into 2026 and 2027, UBS remains skeptical that Porsche can return to double-digit margins without a tariff resolution. The analysts highlight that after the 911 Turbo launch at year-end 2025, there are no major ICE or hybrid product introductions until 2028, while investments remain high and electric models like the e-Cayenne are likely to weigh on margins.
The bank concluded that Porsche is likely a “slow-burn turnaround story” over a two- to three-year period, but noted that much of the recovery is already priced into the stock.
Earlier this week, Porsche this week flagged a more difficult sales outlook for the rest of the year, following a slowdown in the U.S. and continued pressure in China.
Global vehicle deliveries dropped 6% in the first half, easing from a steeper decline in the first quarter.
In North America, a key market where all Porsche models are imported, growth decelerated to 10%, down from a 37% surge in the first three months of the year.
“We expect the environment to remain challenging,” said Matthias Becker, board member for sales and marketing, in a statement on Tuesday.
The company’s China sales plunged 28% during the period, which the management attributed to heightened competition in the world’s largest auto market, where local brands have gained significant ground in both the luxury and electric vehicle segments.
The company has lowered its guidance twice this year, citing the impact of U.S. import tariffs, restructuring of its battery operations, and increased investment in combustion and hybrid technology.