Ferrari raises year forecasts after Q2 results, but investors are not impressed.
Ferrari raises year forecasts after Q2 results, but investors are not impressed.
Ferrari Raises Forecasts for Revenue and Earnings as Second Quarter Results Improve
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Luxury sports car maker, Ferrari, announced on Wednesday that it has raised its forecasts for full-year revenue and core earnings. However, the extent of the increase fell short of exciting investors, with some expressing disappointment.
Ferrari now predicts that its adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) will grow to between €2.19 billion and €2.22 billion ($2.40 billion – $2.44 billion) this year. This is a modest upward revision from its previous forecast of between €2.13 billion and €2.18 billion. The upgrade was attributed to better-than-expected results in personalizations and a strong product mix.
Personalizations, which refer to the added touches customers request to make their cars more suited to their tastes, were a standout factor contributing to the positive guidance upgrade. Chief Executive, Benedetto Vigna, highlighted the strong performance in this area.
While the guidance increase was in line with expectations, Bernstein analyst Daniel Roeska commented that it may still disappoint some investors. He expressed his views in a note, stating, “This may come as a source of disappointment for some.”
The forecast for Ferrari’s 2023 EBITDA margin remained unchanged at approximately 38%. Additionally, the expected cash generation was broadly unchanged at around €900 million.
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Despite the positive news, Ferrari shares experienced a slight decline of 1.4% after the results were published. This places the company among the worst performers within Italy’s blue-chip basket.
In the second quarter, adjusted EBITDA increased by 32% to €589 million, meeting analysts’ expectations. This growth was partly attributed to pricing power, primarily driven by the enrichment of product mix. Notably, the Daytona SP3, the 812 Competizione, and the SF90 models played a significant role in sustaining this improvement.
Vigna confidently stated, “We continue to manage a very strong order book in all geographies,” highlighting the positive state of the company’s sales and demand.
While car shipments slightly decreased in the second quarter across all regions except for EMEA (Europe, Middle East, and Africa), hybrid deliveries accounted for 43% of total shipments. This figure marks a substantial increase compared to the previous year and is a testament to Ferrari’s commitment to advancing electric and hybrid vehicles. Additionally, the quarter saw the initiation of first deliveries for Ferrari’s highly anticipated 12-cylinder Purosangue four-seater.
With Ferrari shares already up by approximately 40% this year, it is clear that investors are optimistic about the company’s performance. The positive second-quarter results and improved guidance are encouraging signs pointing towards a successful year for the luxury car manufacturer.
(Note: The exchange rate used for conversion is $1 = €0.9112)
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