Volkswagen Group's Porsche unit has a much lower value than the lofty valuations being assigned to it ahead of an IPO, analysts at HSBC Holdings, have said.
Porsche is worth between 44.5 billion euros ($45.1 billion) and 56.9 billion euros, analysts including Edoardo Spina said in a note.
That is lower than the 60 billion euros-to-85 billion euros being talked about in the media, they wrote.
By comparison, preference shares in VW have fallen by roughly 23 percent over the last 12 months, giving it a market value of 89 billion euros.
The analysts cautioned that pricing power may wane as supply recovers over the next two years, while demand may take a hit under a recessionary environment.
HSBC’s model is based on comparing multiples with luxury vehicle rival Ferrari as well as German peers such as Mercedes-Benz and BMW, the analysts wrote.
The analysts have removed Tesla from Porsche’s peer group as the U.S. automaker’s multiples reflect sales growth and software revenue potential that are not applicable to the German company to the same degree.
HSBC downgraded its rating on VW ordinary shares to hold from buy, assigning a price target of 188 euros.
The discussion of Porsche’s valuation comes as Intel scales back expectations for its Mobileye IPO in the face of a broader stock slump.
The company expects the IPO to value the self-driving technology business at as much as $30 billion, less than originally hoped, Bloomberg reported Sept. 12, citing people familiar with the process.