(BFM Bourse) – The high-end car manufacturer will enter the DAX 40 to the detriment of the sports equipment manufacturer, which recently lost its general manager, who left for Adidas.
A cougar runs at a maximum speed of 80 kilometers per hour. It is therefore difficult to compete with the speed of a Porsche 911 which can reach 320 kilometers per hour. On the stock market, the famous high-end car manufacturer has clearly outpaced the sports equipment supplier. To the point that Deutsche Börse, the German operator of the Frankfurt Stock Exchange, has decided to include the famous brand in the benchmark index of the German market, the DAX 40, to the detriment, therefore, of Puma. This change will be effective from December 19.
Like the Parisian indices, the composition of the DAX 40 is re-examined every quarter, in particular on the basis of the market capitalization of the free float of the securities.
A good outperformance
“Our rapid entry into the DAX highlights two things. First: our business model is strong and attractive to investors, even in a challenging environment. Second: our definition of modern luxury is compelling, with a focus on sustainability and assuming our social responsibility,” said Lutz Meschke, Deputy Chairman of the Executive Board of Porsche and CFO and IT, in a statement.
The arrival of Porsche in the DAX 40 will strengthen the weight of the automotive sector in the benchmark index of Europe’s leading economy, which already includes Volkswagen, Mercedes-Benz, BMW, Daimler Truck, the tire manufacturer Continental and the Porsche holding company. SE through which the descendants of founder Ferdinand Porsche control both the sports car manufacturer and its parent company Volkswagen.
This entry into the German stock market elite comes less than three months after the IPO of Porsche AG. Introduced at 82.5 euros per share, the manufacturer has since successfully negotiated its first stock market turns and is now trading at 105.9 euros. That is an increase of 28%, much more than that of Volkswagen (+7%) and BMW (+24%) over the same period.
Puma no longer roars
“The IPO gave investors the chance to participate in the story of a modern luxury automotive company with superb fundamentals but still enjoying substantial upside potential thanks to well-adapted pricing (notably the Macan) and its merchandising/licensing,” Deutsche Bank pointed out in a recent note. The German establishment advises the purchase value with a target price of 115 euros.
The German bank also appreciates the shift towards electricity taken by the company with the successful launch of a first reference model, the Taycan, in 2020. The group is aiming for 50% of electrified vehicles (rechargeable hybrids and battery-powered cars) in its sales in 2025 then 80% of purely electric vehicles in 2030.
Puma for its part is hardly roaring, with a drop in its stock price of 56% since the beginning of the year. The sector as a whole is penalized by fears linked to inflation as well as the accumulation of stocks due to a sudden improvement in the supply chain. The company last month lost its chief executive, Bjorn Gulden, who left to put Adidas back in the saddle. He has since been replaced by Arne Freundt, a 40-year-old who spent the last ten years of his career at Puma. Puma thus weighs more than 7.4 billion euros on the stock market, against nearly 100 billion euros for Porsche AG.
Julien Marion – ©2022 BFM Bourse