Ferrari's Stock Plunges After EV Reveal and Mixed Financial Results
Ferrari (RACE) has revealed its first electric vehicle (EV), the Elettrica, and shared its financial outlook for the year. The luxury carmaker's stock experienced a significant drop following the announcement.
Ferrari's adjusted EPS for Q2 rose 4% year-over-year to 2.38 euros ($2.70), surpassing Wall Street's forecast of $2.57. However, net revenues of 1.79 billion euros ($2.03 billion) for the quarter missed analysts' expectations, increasing 4.4% year-over-year.
The company raised its fiscal 2025 guidance, now expecting net revenue of at least 7.1 billion euros ($8.2 billion). By 2030, Ferrari forecasts net revenue of around 9 billion euros, with adjusted EBITDA expected to be at least 3.6 billion euros. Despite these figures, Ferrari's U.S.-listed shares dropped almost 15% on Oct. 9, marking its worst trading day since its IPO in 2015.
Ferrari's operating profit (EBIT) for the quarter rose to 552 million euros, up 8.1%, delivering a 30.9% operating margin. The company's first electric model, Elettrica, is expected to start at around 500,000 euros (roughly $580,400).
Analysts have mixed views on Ferrari's stock. While some maintain a 'buy' rating, others have adjusted their price targets downward. BofA Securities has set a target of 450 EUR, Deutsche Bank suggests 500 EUR, and Jefferies recently reduced its target to 345 EUR, maintaining a 'hold' rating. Ferrari has also scaled back its EV ambitions, with all-electric cars now expected to make up only 20% of the lineup by 2030, down from its 2022 target of 40%.
Ferrari's financial results and long-term targets have led to a significant drop in its stock price. Despite the setback, the company continues to invest in electric vehicle technology, with its first EV model, Elettrica, set to launch soon. Analysts remain divided on the company's prospects, with varying price targets and recommendations.
