Ferrari Supercars Drive Stock to All-Time High

Cars and Drivers

Published: May 4, 2017 11:20 am

Last Updated: January 12, 2020 12:19 pm

Ferrari N.V. (NYSE: RACE) has reported first-quarter 2017 earnings of €0.65 (about $0.71) per share, well above the consensus estimate of $0.60 per share, and the stock jumped more than 5% to an all-time high. Revenues totaled about $898 million, up 22% year over year and also were well above the consensus estimate of $834.26 million.

The company attributed the big numbers to its big cars. Sales of its V-12 models rose 50%, more than offsetting a sales decline of 3% in the V-8 models. Ferrari singled out its GTC4Lusso, the LaFerrari Aperta and the F12tdf as particularly strong performers.

Looking ahead, the company confirmed its outlook for unit sales of 8,400, including the V-12 supercars, and net revenues of more than €3.3 billion (about $3.61 billion). Adjusted EBITDA is forecast to exceed €950 million ($1.04 billion).

In 2014, the year before its initial public offering, Ferrari delivered 7,000 cars. Former chairman, Luca Cordero di Montezemolo, had bet on keeping production low and lucrative customizations high. Fiat Chrysler Chairman and CEO Sergio Marchionne wanted Ferrari to expand its footprint in the premium car market and ultimately produce around 10,000 cars a year.

Marchionne won the argument and Montezemolo resigned. If Ferrari meets its delivery target for this year, unit sales will have improved by more than 25% in three years. That’s a compound annual growth rate of about 6%, and if Ferrari can keep up that pace, it will be near 10,000 units in a little over two more years.

And the most expensive cars are the best sellers. According to Car and Driver magazine, the GTC4Lusso starts at $300,000. The F12tdf starts at around $324,000 and the LaFerrari rings in at a cool $1.4 million. The V-8 California T starts at around $206,000, and the 488GTB carries a starting price of $249,150.

More units sold for more revenue per unit — that’s a sales model any company would take.

Ferrari’s stock traded up more than 5% in the late morning Thursday to $79.89, a new all-time high. The 52-week low is $38.71, and the 12-month consensus price target is $68.79.

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