That depends on your plan. Portugal has excellent rail service from Lisbon and Porto. Trains are fast, clean and affordable. The Alfa trains are faster than cars, doing Porto-Lisbon in 2.5 hours. IC trains stop in major cities, and are slightly slower than the Alfa. But the rail network does not reach tiny fortified mountain villages, small fishing towns, and cities on interior river ways. In that case a car might be recommended to explore. But, CP Portuguese Rail does offer a rail and rent program with Avis, so you can take the train out of a city and have a rental car waiting when you get to certain stations.  And, there is great rail service to some key cities, such as Aveiro, Coimbra., Cascais, Sintra, Tomar, Evora and Guarda. But, remember, tolls and gas are much more expensive in Europe, and rail tickets are a lot less than in the US.