More recent report from same Cie.
Confidential:
"Porsche (IL): Still optimistic about Cayenne`s prospects
* Porsche held an analysts meeting and product launch on July 19.
Management indicated that earnings for the year ending July, 2003 will show a significant improvement (as expected) but are not yet willing to make any detailed projections about 2003/04. We believe Porsche may find it difficult to grow earnings next year. Cayenne volumes will be up, but mix and profitability of the vehicle remain unquantified. 911 and Boxster volumes will be down. We remain comfortable with both our 2002/03 estimates (EPS
EUR35.0) and 2003/04 forecast (EPS EUR35.6).
* Management were not willing to formally confirm the V6 Cayenne but
it is clear that launch is imminent. Porsche stated explicitly that they believe Cayenne can sell 25K units of V8 and Turbo in the next financial year - in line with previous statements. The company hopes that V6 volume will be purely incremental to this. We remain concerned that the nature of the luxury SUV segment (X5 and M-Class are 80% six cylinder) means V6 demand will quickly exceed V8 demand. Even if Porsche sells 30K plus Cayennes next year, we see no reason to change our earnings estimates given the likely minimal margins of V6 versions.
* Cayenne's novelty value means current Turbo & V8S sales rates may
not be representative of normal demand, in our view. Once the order backlog is fulfilled, we believe Porsche may need to build a mix rich in V6s if it wants to sustain production rates. Porsche reiterated that is embarking on cost cutting and will 'look first at the cost structure for Cayenne'. Currency concerns may not be the only reason for this, in our view.
* With 2002/03 earnings on track and with management sticking to their
guns on Turbo/V8S volumes next year, the stock is likely to find support at current levels. A low valuation also helps. But we remain concerned that Cayenne profits will not match the more optimistic hopes in the market. Porsche is now the most exposed OEM to the luxury SUV segment, where we fear declining mix and overcapacity will see margins pressured. "
"Porsche (IL): Still optimistic about Cayenne`s prospects
* Porsche held an analysts meeting and product launch on July 19.
Management indicated that earnings for the year ending July, 2003 will show a significant improvement (as expected) but are not yet willing to make any detailed projections about 2003/04. We believe Porsche may find it difficult to grow earnings next year. Cayenne volumes will be up, but mix and profitability of the vehicle remain unquantified. 911 and Boxster volumes will be down. We remain comfortable with both our 2002/03 estimates (EPS
EUR35.0) and 2003/04 forecast (EPS EUR35.6).
* Management were not willing to formally confirm the V6 Cayenne but
it is clear that launch is imminent. Porsche stated explicitly that they believe Cayenne can sell 25K units of V8 and Turbo in the next financial year - in line with previous statements. The company hopes that V6 volume will be purely incremental to this. We remain concerned that the nature of the luxury SUV segment (X5 and M-Class are 80% six cylinder) means V6 demand will quickly exceed V8 demand. Even if Porsche sells 30K plus Cayennes next year, we see no reason to change our earnings estimates given the likely minimal margins of V6 versions.
* Cayenne's novelty value means current Turbo & V8S sales rates may
not be representative of normal demand, in our view. Once the order backlog is fulfilled, we believe Porsche may need to build a mix rich in V6s if it wants to sustain production rates. Porsche reiterated that is embarking on cost cutting and will 'look first at the cost structure for Cayenne'. Currency concerns may not be the only reason for this, in our view.
* With 2002/03 earnings on track and with management sticking to their
guns on Turbo/V8S volumes next year, the stock is likely to find support at current levels. A low valuation also helps. But we remain concerned that Cayenne profits will not match the more optimistic hopes in the market. Porsche is now the most exposed OEM to the luxury SUV segment, where we fear declining mix and overcapacity will see margins pressured. "
, Porsche would never do an SUV, it defies the purpose, it would be like buying a Ferrari MiniVan!!! 
) or an FX45 for the style.
