Shares of Ferrari (RACE) plunged by 7% on Tuesday after posting mixed Q3 results, which included a 2% drop in deliveries compared to last year for a total of 3,383 units. Revenue for the quarter rose 7% to €1.64 billion ($1.79 billion), while adjusted EPS hit €2.08 ($2.27). This was a miss for the former and a beat for the latter, as pictured below.
Sales grew in most regions, with the Americas leading at 4%. However, China deliveries plunged by 22%, which impacted overall performance. Nevertheless, CEO Benedetto Vigna highlighted the interest in new models like the Purosangue SUV, Roma Spider, and the 296 GTS. Ferrari also saw strong demand in its ultra-exclusive lineup, including the Daytona SP3 and the recently launched F80 hypercar, which sold out at €3.6 million each. Indeed, Ferrari expects stronger sales in Q4 to support full-year guidance.
Analysts remain cautiously optimistic. CFRA’s Garrett Nelson raised his price target to $460, citing solid 2025 growth prospects and expanding profit margins. Yet, he kept a Hold rating, noting Ferrari’s current valuation leaves little room for upside. Despite recent challenges, Ferrari’s limited-edition models and prestigious brand continue to position it favorably compared to other luxury automakers.
Guidance for FY 2024
Looking forward, management has provided the following guidance for FY 2024:
- Revenue greater than €6.55 billion versus analysts’ estimates of €6.621 billion
- Adjusted EBITDA margin of 38%
- Adjusted EBIT margin of 27.5%
- Adjusted EPS of at least €7.90 compared to analysts’ estimates of €8.05
As we can see, the company’s outlook is as expected, which likely did little to impress investors.
Is RACE Stock a Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on RACE stock based on nine Buys, four Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 32% rally in its share price over the past year, the average RACE price target of $491.88 per share implies 11.4% upside potential.
