Ferrari’s (RACE.MI) latest sales surge puts it in touching distance of luxury player Hermes International (HRMS.PA). Shares of the Italian car company rose 9% on Thursday after it reported record results for the year ending December 2023. Most importantly, instead of lowering its 2024 guidance, as analysts expected, Ferrari said it is planning to deliver net revenue of over 6.4 billion euros with adjusted EBITDA margin to grow above 38%. Scarcity is working in Ferrari’s favour. Its sold-out order book of cars like the 488 Pista which can cost over $400,000 stretches several years, and CEO Benedetto Vigna said he is confident he can even hit the higher end of the company’s 2026 guidance which includes an adjusted EBITDA estimate of 2.5 billion euros to 2.7 billion euros.
That explains Ferrari’s new luxury valuation. Including Thursday’s share move, the company now trades at 46 times the 2024 earnings per share it expects to deliver. That compares to an average of its global auto peers including Porsche (P911_p.DE) of just 7 times, according to LSEG data. But given Ferrari is positioning itself more as a luxury goods player, Vigna will be particularly pleased to be nearly on par with Hermes. The titan of premium handbags worth some $20,000 trades on 47 times its expected 2024 earnings, according to analyst estimates polled by LSEG. Ferrari only needs a bit more gas to be in pole position. (By Karen Kwok)
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