Topline
Shares of Ferrari plummeted in European and U.S. trading on Thursday, pacing what would be the luxury automaker’s worst day yet in both markets after unveiling updated guidance for earnings that fell well below analyst expectations.
The luxury automaker also scaled back expectations for its new electric vehicle business.
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Key Facts
Ferrari’s shares fell more than 13% to around $414 on the New York Stock Exchange as of around 11:40 a.m. EDT, marking what would be the largest single-day decline for Ferrari since trading on the stock opened in October 2015.
The stock dropped more than 14% in Milan, falling about €60 to around €357.60, pacing Ferrari’s largest single-day loss since the automaker listed shares on the Italian exchange in January 2016.
Ferrari said during its Capital Markets Day event on Thursday that it expected revenue of €7.1 billion this year, up from earlier forecasts of just over €7 billion, while also projecting revenue of around €9 billion in 2030 and adjusted earnings of at least €3.6 billion, up from just below €2.7 billion.
RBC Capital analyst Tom Narayan wrote Thursday that while the investment firm expected a “conservative” estimate for earnings in 2030, they came well below the growth rate Ferrari projected back in 2022, suggesting investors would expect a worse “downshift” for earnings than anticipated.
Ferrari’s guidance reflects “conservativism” from the automaker’s management and falls below Citi’s worst-case forecasts, Narayan said.
New York-based investment research firm CFRA downgraded Ferrari’s stock to a “sell” and lowered its target for shares from $475 to $350, citing concerns of slowing growth.
Crucial Quote
Ferrari CEO Benedetto Vigna, while discussing the automaker’s long-term guidance, said, “I think people were expecting a higher top line, but I think it is important that we execute what we say. We cannot commit on something we cannot achieve.”
Contra
Other analysts remained optimistic about Ferrari’s growth prospects: JPMorgan analysts wrote they held a “great deal of confidence” that Ferrari would execute on long-term goals, citing “ample evidence that demand currently far outstrips supply.” Deutsche Bank, citing similar optimism, upgraded the stock to a “buy” and raised its price target for Ferrari’s shares to €520.
Tangent
Earlier Thursday, Ferrari announced it would scale back plans to manufacture electric vehicles. The automaker said it would target a model lineup of 40% internal combustion engine, 40% hybrid and 20% fully electric cars, down from earlier projections of 40% EV sales. A reversal in EV plans came as Ferrari unveiled its maiden electric vehicle, the “Elettrica,” which Ferrari said would first be delivered in late 2026. Other automakers have scaled back plans for EV sales targets, including Volvo, which abandoned plans to sell only EVs by 2030.
Further Reading
Ferrari On Track For Worst Trading Day Ever As Guidance Disappoints (CNBC)
