- Ferrari fell as much as 6.7% in Milan, the steepest intraday decline since May 2021, and trading was temporarily halted.
Ferrari NV shares fell the most in three years after the luxury car maker reported underwhelming earnings and failed to raise its outlook.
Delivery gains in Europe and the Americas failed to offset a 20% drop in greater China, where tariffs are weighing on the profitability of Ferrari’s made-in-Italy supercars. Adjusted operating earnings were in line with estimates.
“We wonder if some investors were expecting a beat and raise,” said Tom Narayan, an analyst at RBC Capital Markets.
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Ferrari fell as much as 6.7% in Milan, the steepest intraday decline since May 2021, and trading was temporarily halted. The stock is still up around 40% in the past year.
Automakers are coming under pressure from the broader economic downturn that is starting to weigh even on resilient luxury consumers. Porsche AG last month warned of a slowdown in China, where buyers have put off purchases as a real estate crisis undermines confidence.
To be sure, Ferrari’s earnings were broadly in line with estimates, and the company confirmed its full-year guidance amid healthy demand for pricey models like the €2 million ($2.2 million) Daytona SP3 and more personalizations.
The results “may have resulted in a touch of disappointment for those new to the stock,” Bloomberg Intelligence analyst Mike Dean said in a note. Ferrari’s high visibility on sales means that an upgrade “was always unlikely.”
While Chief Executive Officer Benedetto Vigna has started a shift toward battery power, Ferrari still is relying on its profitable combustion engine vehicles to protect margins. Adjusted earnings before interest, taxes, depreciation and amortization climbed 13% in the period, to €605 million.
Competition to make the transition is intensifying. China’s BYD Co. in February unveiled a high-performance EV priced from around $233,000.
Maranello-based Ferrari is building a factory to make hybrid and electric cars that will be ready next month, with the first fully electric model expected in late 2025.
First Published Date: 08 May 2024, 06:40 AM IST