* Porsche forecasts 5.5% to 7.5% margin this year after 1.1%

in 2025

* Details on recovery plan due in October

* CEO pledged to focus on high-margin vehicles and

cost-cutting

(Writes through, adding detail, context and investor comment)

By Rachel More

BERLIN, June 22 (Reuters) - Porsche faces

fundamental challenges in crucial markets and a long road back

to recovery, but the German sports car maker is sticking by this

year's financial targets, its CEO will tell investors on

Tuesday.

A profit warning from premium rival BMW last week,

citing a prolonged downturn in China and rising costs resulting

from the Iran war, has prompted analysts to look more closely at

other carmakers' targets for the year.

Porsche continues to expect its operating margin to recover

to between 5.5% and 7.5% this year despite persistent challenges

in key markets, CEO Michael Leiters is set to say at the

company's AGM, according to speech text published online ahead

of the meeting.

"In the short term, we will not see a return to the targeted

margins we have seen in the past," the speech says, highlighting

U.S. tariffs and Chinese competition as major challenges.

RECOVERY PLAN DETAILS EXPECTED IN OCTOBER

Leiters, however, confirmed the 2026 forecast "despite the

environment remaining very challenging".

Investors will be eager to hear how the new CEO plans to

restore the fortunes of the Stuttgart-based maker of the 911

sports car, which is part of the Volkswagen group,

after its operating margin slumped to 1.1% last year.

Leiters, who took over from Volkswagen CEO Oliver Blume at

the start of the year, has pledged a shift to higher-margin

sports cars and intensified cost cuts, promising details of his

recovery plan at a capital markets day in October.

"We shareholders look at Porsche today and see a shambles,"

Deka investment fund manager Ingo Speich will tell management,

according to excerpts from the text of his speech.

Porsche's strong brand gives grounds for optimism, but the

company must simplify its product offering in a more focused

strategy, Speich is set to say.