(News Bulletin 247) – The luxury car manufacturer saw its revenues jump 23.5% in the third quarter while its margins significantly improved. The title is progressing well on the Milan Stock Exchange.

The prancing horse is more fiery than ever. Ferrari, the luxury brand in essence in the automobile industry, published financial results this Thursday marking a new record, according to the Maranello company.

This is despite the fact that luxury groups, with which the Italian company is often associated on the market, have nevertheless experienced a clear slowdown over the past quarter. For example, LVMH was punished by investors after delivering growth below expectations a few weeks ago.

“Unlike most luxury groups, Ferrari does not have an aspirational component (in short, younger and less affluent customers than traditional buyers of luxury items, Editor’s note) and, as such, should be much more defensive” on the stock market, underlined Royal Bank of Canada in August.

This is reflected in the car manufacturer’s quarterly accounts, with momentum that hardly seems to be slowing down.

Earnings per share up 48%

Over the period from July to the end of September, Ferrari delivered 3,459 vehicles, an increase of 9%, although it should be remembered that Ferrari does not seek to maximize its volumes, so as to maintain the value of its brand and its desirability , a key concept in the world of luxury.

The group has notably benefited from the rise in power of its recent models, Ferrari citing the 812 Competizione A, a convertible variant of the 812 Competizione, a sports vehicle, as well as the Purosangue, the first SUV of the Italian brand.

Volumes were driven by the “Americas” zone with a 21.1% increase in deliveries, followed by “Europe-Middle East-Africa” up 8%. On the other hand, the region made up of China, Hong Kong and Taiwan recorded a decline of 8%.

Regarding the results themselves, revenues jumped 23.5% year-on-year in the third quarter, to 1.54 billion euros, while adjusted operating profit increased 41.6% to 423 million euros. euros. The corresponding margin increased by 3.5 percentage points to 27.4%, profitability much more in line with luxury than automobiles (Stellantis, the sector benchmark, posted a current operating margin of 14.4% in the first half of 2023).

Adjusted earnings per share increased by 48% year-on-year to 1.82 euros. Cash generation from industrial activities increased by 38% to 301 million euros.

Analysts overtaken

“Once again, Ferrari beat expectations and raised its forecasts, even exceeding the consensus which was already higher than management’s previous indications,” appreciates Royal Bank of Canada.

Ferrari thus surpassed the consensus by 4.5% on its revenues, by 6.8% on its adjusted operating profit and by 13% on adjusted net profit per share. The manufacturer also published an adjusted operating margin 60 basis points (0.6%) higher than the 26.8% figure expected by analysts.

“We believe management managed delivery variability by deferring certain units from the second quarter to the third, which highlights Ferrari’s unique ability to manage its operational performance,” continues Royal Bank of Canada.

A sign of the strong demand for the company’s products, the company assured that its order book already covered its entire business plan planned for… 2025.

In a statement, Ferrari Chief Executive Benedetto Vigna hailed “another record quarter with profit growth driven by an even richer mix and the continued appeal of personalization, leading us to increase forecasts for 2023.

Ferrari stronger than any CAC 40 group

Ferrari has in fact, for the second time in three months, raised its annual objectives which are very detailed. Ferrari expects revenues of around 5.9 billion euros, compared to 5.8 billion previously and 5.1 billion in 2022. Adjusted operating profit is expected at more than 1.57 billion euros, compared to a range ranging from 1.51 billion to 1.54 billion previously, with an anticipated margin landing at more than 26.5%. Net profit per share will be at least 6.55 euros and free cash flow from industrial activities is expected to exceed 900 million euros.

On the Milan and New York Stock Exchange, the two listing places for Ferrari (which also trades under the acronym “RACE”, a reference to motor racing), the action takes 4.7% and 5% respectively. 2% around 4:35 p.m. In a market, it is truly buoyant with the fall in bond yields this Thursday, a movement conducive to supporting the valuations of growth and luxury groups, which display high valuations.

Like Ferrari since the prancing horse trades on the stock market at more than 50 times its expected profits over twelve months, compared to 48.5 times for Hermès, one of the most expensive shares in luxury, 70 times for Tesla and…. three or four times for Stellantis and Volkswagen.

Since the start of the year, Ferrari shares have jumped 50%. No group in the CAC 40 (Stellantis, the biggest rise in the Parisian index, shows an increase of 38.5%) and even in the SBF 120 is doing as well. A sign that Ferrari is now playing in the big leagues, in September the Italian car manufacturer joined the Euro Stoxx 50, the stock market elite of the euro zone.