Ferrari Shares Rise More Than 4% After Q1 Beats Across The Board

Shares of Ferrari are up more than 4% this morning – their biggest move in 3 months – after the luxury exotic auto manufacturer reported strong Q1 numbers and kept its full year guidance in line.

The automaker delivered 3,567 vehicles in the quarter, a rise of 9.7% year over year, and beating estimates of 3,445 deliveries. Year to date gains for Ferrari stock now stand at 32%, according to a Thursday morning Bloomberg wrap-up of the report. From the same wrap-up, here’s a look at the company’s numbers for the quarter:

• Adjusted Ebitda EU537 million, +27% y/y, estimate EU509.4 million (Bloomberg Consensus)
• Adjusted Ebit EU385 million, +25% y/y, estimate EU358 million
• Adjusted Ebit margin 26.9%, estimate 25.4%
• Adjusted net income EU297 million, +24% y/y, estimate EU270.5 million
• Adjusted diluted EPS EU1.62, estimate EU1.47
• Industrial free cash flow EU269 million, -10% y/y, estimate EU252.9 million
• Revenue EU1.43 billion, +20% y/y, estimate EU1.38 billion

Analysts liked what they saw, with RBC predicting the automaker will raise guidance later in the year:

“Unsurprisingly, Ferrari didn’t raise guidance; unlike other carmakers this results season, maintaining guidance doesn’t suggest a downshift in rest of year. More likely co. will raise guidance later in the year; thus broker not concerned that consensus is already at top-end of the range.”

RBC has an “outperform” rating on shares. 

Morgan Stanley called the stock “too cheap” and reiterated it as a “top pick”. The investment bank said that the Q1 top line beat was helped by higher than expected unit volumes and better price/mix. Outperformance in the Americas, which were up 31% versus consensus, helped offset poor EMEA numbers, the bank said, calling Ferrari’s unchanged guidance now “conservative”. 

Jefferies called it a “solid beat on all metrics” also driven by price/mix. 

“We have decided to reopen orders for the Purosangue, suspended due to an initial unprecedented demand, and launched the Roma Spider to further enrich our offer,” Ferrari said in its report.

Recall, Ferrari had been called a “top pick” at Morgan Stanley since the beginning of March. “We believe RACE is the best positioned company in our coverage in a highly uncertain macroeconomic and geopolitical tape. In addition to its strong fundamentals, we believe RACE has levers to pull for both growth or downside protection, within a wide dispersion of macro outcomes,” Adam Jonas and peers wrote in their note at the time.

“Ferrari has built its moat on scarcity, desirability, and brand values around performance (“driving thrills”) and luxury which is the key driver for continued demand. These factors make it hard for a competitor to replicate the Ferrari model overnight. In our view, buying a Ferrari today is not so much about ‘the sound of the engine’ or the ‘performance’ in and of itself,” it continues.

“Rather, we think it is a totality of factors that drive customers to want the elements that a Ferrari possesses: scarcity, desirability, connotations of luxury and performance (stemming from Formula 1 racing pedigree), and exquisite Italian design and engineering. The brand and scarcity drive unprecedented demand for the vehicles, which Ferrari is able to leverage with tight supply control.”