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Despite a robust 13% increase in core earnings in the first quarter, Ferrari’s share price declined as it confirmed its full-year forecasts, failing to excite investors.
While the luxury sports car maker celebrated a “very positive” start to the year, market sentiment remained subdued due to unchanged guidance for the year ahead.
Factors Driving Q1 Performance:
Ferrari’s quarterly results were buoyed by several factors, including pricing power, product sales mix, and increased contributions from personalized vehicles.
Additionally, deliveries of its limited-series Daytona SP3 model, priced at 2 million euros, significantly impacted earnings.
CEO’s Perspective and Strategic Focus:
CEO Benedetto Vigna emphasized the company’s double-digit growth in revenue and profits despite stable car deliveries.
He attributed this success to a stronger product and country mix, as well as a greater emphasis on personalization. Vigna reiterated Ferrari’s “value over volume” strategy, highlighting its continued success.
Analysts’ Assessment and Market Response:
Analysts at Bernstein praised Ferrari’s results as “of high quality,” noting the importance of product mix and pricing in driving margin development.
However, Ferrari’s decision to maintain its full-year adjusted EBITDA forecast dampened market sentiment, leading to disappointment among investors. This resulted in Ferrari’s share price decline following the earnings announcement.
Shipment Trends and Regional Performance:
Despite positive earnings, Ferrari experienced a decline in shipments, primarily driven by a 20% drop in the China, Hong Kong, and Taiwan regions. This decline contributed to concerns about market performance in key regions.
Following the earnings announcement, Ferrari’s Milan-listed shares turned negative, reflecting market disappointment over unchanged full-year guidance. Despite the decline, Ferrari’s shares remain close to their all-time high, indicating continued investor confidence in the brand’s long-term prospects.
