The DAX Index has done well this year, rising by over 20% from its lowest point in January and by 30% from its lowest level in April. It was trading at €24,240 on Thursday, a few points below its all-time high of €24,624. This article explores whether Porsche, the worst stock in the index will rebound.
Best and worst-performing DAX Index stocks
The DAX Index has performed well this year, with most of its constituent companies experiencing double-digit gains. Rheinmetall, the biggest defense company, was the best-performing company, rising by 190% this year.
Siemens Energy stock price has jumped by 92% this year as demand for energy solutions has gained steam. Other similar companies like GE Vernova and Rolls-Royce have also jumped this year.
Commerzbank’s share price jumped by 87% this year amid increased accumulation by Unicredit, one of the top Italian banks. The other top gainers in the index are companies like Deutsche Bank, Bayer, E.ON, RWE, and Siemens Energy, which have all jumped by double digits.
Porsche share price is the worst-performing in the DAX Index after falling by 24% this year. The other top laggards in the German DAX are firms such as Merck, Henkel, Zalando, Adidas, and Symrise.
Why Porsche share price is the top laggard
Porsche, a top German automaker, is the worst-performing company in the DAX Index and is hovering near its all-time low.
It was trading at €44.13, a few points above the all-time low of €38.43. It has plunged by over 60% from its all-time high, erasing billions of euros in value.
Porsche has underperformed compared to other German automakers, such as BMW and Volkswagen. It also lagged behind other companies like Renault and Stellantis.
The main reason why this happened is that its top markets are in trouble. Its financial results showed that the important Chinese sales have continued its downward trend.
The most recent results showed that Chinese deliveries plunged to 9,470 from 16,340 in the same quarter last year. This is happening among other luxury players, such as LVMH, Kering, and Hermes.
Its other markets are also not performing well, with German sales declining from 11,274 to 7,495. Excluding Germany, the European sales dropped from 20,044 to 18,000.
Therefore, the Porsche stock price has plunged as its fastest-growing market comes under pressure. Its North American sales rose from over 15,000 in Q1’24 to 20,698 this year.
Therefore, there is a likelihood that the business will be affected by Donald Trump’s tariffs since all its vehicles are manufactured in Germany. As such, these tariffs will likely make its vehicles more expensive to American vehicles.
While a deal between the US and Europe is nearing, there are signs that Trump will maintain a minimum 15% tariff. This means that the company will either boost prices, move some of its operations to the US, or “eat” the tariffs.
Porsche stock price technical analysis
The daily chart shows that the Porsche stock price has remained in a tight range in the past few months. It has remained intact at €44, slightly above the year-to-date low of €38.50, its lowest point in April.
The stock has formed a symmetrical triangle pattern, which is part of the bearish pennant. Therefore, the stock will likely remain under pressure in the coming months and drop to €38. A move below that level will point to more downside.
On the positive side, there is a chance that the stock will bounce back as the market adapts to the new normal of high tariffs and its sales growth resume.
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