Ferrari investors were taken aback by the latest earnings report, as the Italian luxury sports car maker reported a 13% increase in first-quarter earnings compared to the same period last year. However, sales remained flat, with a 20% decline in China. This led to a 6-1/2% drop in Ferrari’s share price. Despite the setback, Ferrari’s share price has been strong, rising from €305 to almost €406 by the end of March. The stock has since recovered about half of the drop to trade at around €388.
Ferrari reported that adjusted EBITDA rose to €605 million, in line with analysts’ expectations. The company’s EBITDA guidance for the year remained unchanged. Last year, Ferrari’s EBITDA reached €2.28 billion and it expects this to rise to €2.45 billion this year. Additionally, Ferrari forecasts sales worth over €6.4 billion this year with adjusted EBITDA margins above 38%.
Despite the disappointment from some investors, Bernstein Research noted that Ferrari’s order book extends well into 2026. The report questioned the lack of improved profit expectations by Ferrari, but highlighted that the company can easily switch deliveries between lower and higher-priced vehicles to maintain earnings stability. HSBC Global Research also emphasized Ferrari’s earnings stability, attributing it to the company’s extended order book that shields it from profit volatility.
In terms of regional exposure, Ferrari appears to be the least exposed to potential increased tariffs on luxury car imports with big ICE engines in China. HSBC Research pointed out that Ferrari imports 100% of its vehicles into China but also has the highest pricing power to pass on any potential tariffs to consumers. Among luxury automakers, Porsche is the most exposed to China with a 21% regional exposure, while Ferrari has the lowest exposure at 9%, based on 1Q24 reported figures.
Looking ahead to 2024, Ferrari aims to boost sales with the introduction of new models like the Purosangue SUV, 296 GTS, Roma Spider, and Daytona. The company is cautious and has set a 20% cap on sales of the Purosangue to prevent overdependence on an SUV. Additionally, Ferrari plans to launch the new coupe, 12Cilindri, as a replacement for the 812 Superfast. The 6.5-liter V-12 gasoline engine in the new coupe will produce 818hp, comparable to the 812 Competizione which is nearing the end of production. Pricing for the 12Cilindri starts at €395,000 in Italy.
