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A Ferrari is parked outside the New York Stock Exchange in celebration of the Ferrari Automotive Company’s IPO on October 21, 2015 in New York City.
Andrew Burton | fake pictures
Ferrari is now worth more than General Motors or Ford, after its market value rose Monday morning to around $ 30 billion.
Ferrari’s shares rose as much as 7% on Monday after the Maranello, Italy-based sports car maker reported better-than-expected earnings. Despite closing its factory in March, the company’s total car shipments increased 5% to 2,738. Revenue fell just 1% to $ 1.02 billion, better than analysts expected at $ 852 billion.
The company also restarted its factories in Maranello and Modena on Monday, and is expected to return to full production on Friday.
Despite the fact that Ferrari makes just 10,000 cars a year, compared to General Motors’ production of approximately 7.7 million vehicles last year, investors are betting that Ferrari’s brand, high prices, and profit margins are likely to boost the stock through the coronavirus crisis better than Other car brands.
Ferrari’s market capitalization reached $ 30.1 billion in early trading on Monday, after re-establishing at $ 29.8 billion later in the day. General Motors’ market capitalization fell to less than $ 29.3 billion, while Ford’s fell to $ 19.2 billion. Fiat Chrysler, which launched Ferrari in 2015, has seen its market capitalization decline to less than $ 13 billion. Ferrari’s share price has more than tripled since it went public.
While Ferrari lowered its forecast for the year and warned of continued weakness in its Formula One business and other segments in the second quarter, investors were encouraged by its relatively mild revisions in the coming year.
In April, Ferrari announced a dividend of 1.13 euros ($ 1.23) per share, an increase of 10%. In its earnings announcement, Ferrari said it was lowering its net revenue estimates to between 3.4 billion and 3.6 billion euros ($ 3.7 billion to $ 3.9 billion), from 4.1 billion euros ($ 4.5 billion) previously . It reduced its forecast of adjusted earnings before interest, taxes, depreciation and amortization to a range higher than 1.2 billion euros ($ 1.31 billion) from a range higher than 1.43 billion euros ($ 15 billion).
The value of the Ferrari brand and the demand for its sports cars, priced between $ 215,000 to over $ 1 million, has allowed the company to maintain margins of 24%, compared to most automakers. , whose margins are less than 5%.
During a call with investors, Ferrari CEO Louis Camilleri said that while the United States has seen “several cancellations” of car orders in the United States and Australia, “so far there have been no flashing red lights in any geography.”
