Ferrari Reports Strong Q1 Earnings Amidst Stable Deliveries

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.