Deutsche Bank cuts Polestar target price to $1 from $1.5

Deutsche Bank cuts Polestar target price to $1 from $1.5

Deutsche Bank has significantly lowered its target price for Polestar Automotive Holding UK PLC (NASDAQ: PSNY) from $1.5 to $1.0, citing ongoing challenges and market conditions [1]. The move reflects the investment bank's assessment of the electric vehicle (EV) manufacturer's financial performance and market prospects.

Polestar reported its Q2 2025 earnings on September 3, 2025, revealing a revenue of approximately $791 million, which exceeded the estimated $641 million. However, the company's earnings per share (EPS) of -$0.49 fell short of the estimated -$0.12 [1]. The company's financial metrics indicate several challenges, including a negative price-to-earnings (P/E) ratio of -2.69 and a debt-to-equity ratio of -2.15 [1].

Despite the revenue beat, Polestar's stock fell by 17.67% in pre-market trading, reflecting investor concerns over ongoing challenges [2]. The company's gross margin remained negative at -43.07%, primarily due to a significant impairment expense [2]. The company's adjusted gross margin improved to 1.4% from -2.6% year-over-year [2].

Polestar's financial health score remains weak at 1.52, reflecting investor concerns about cash burn rates and debt levels [2]. The company's current ratio of 0.58 indicates potential liquidity challenges in meeting short-term obligations [1].

Deutsche Bank's target price reduction reflects these challenges and the company's ongoing efforts to navigate the rapidly growing EV market. The investment bank has highlighted Polestar's ability to exceed market expectations in revenue but has expressed concerns about the company's ability to manage costs and margins.

Polestar's CEO, Michael Lohscheller, and CFO, Jean-Francois Mady, emphasized the company's commitment to sustainability and electric mobility during the earnings call. They noted that the company is targeting a 30-35% compound annual growth rate in retail sales volume from 2025 to 2027 [2].

Investors should closely monitor Polestar's financial performance and market position as the company continues to expand its market presence and product offerings. The upcoming launch of the Polestar V on September 8 at the IAA in Munich is a key strategic initiative for the company.

References:
[1] https://site.financialmodelingprep.com/market-news/polestar-q2-2025-earnings-overview
[2] https://www.investing.com/news/transcripts/earnings-call-transcript-polestar-q2-2025-revenue-beats-forecast-stock-falls-93CH-4222551