(News Bulletin 247) – The luxury car manufacturer’s shares are suffering on the Milan Stock Exchange after revealing revenues and gross operating income lower than expectations in the third quarter.

We can discuss at length Ferrari’s membership in the automobile sector on the stock market. Due to its inelastic demand, its culture of scarcity and its wealthy clientele, the prancing horse group is compared much more to Hermès than to Porsche and Mercedes-Benz by analysts.

However, Ferrari remains above all a car manufacturer. And that the legend of motor racing beats by far all other European automobile groups this year, in terms of stock market performance, with a jump of 35%. Renault, which recorded the second largest increase in Europe, is far behind (+10%).

The fact remains that this enviable stock market run hit a snag this Tuesday. While this results season has been difficult for many listed European groups, Ferrari is not immune to the trend and finds itself sanctioned.

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An ERP problem

The Italian company delivered 3,389 vehicles in the third quarter, down 2% year-on-year and below expectations, with the consensus being 3,454 units, according to Bernstein.

Ferrari notably saw its sales, in volume terms, decline by 26% in Greater China (mainland China, Hong Kong and Taiwan). The “Americas” zone showed a decrease of 2% while Europe increased by 2%.

“Ferrari had clearly indicated during the first half of 2024 and in its pre-closing briefing (of the third quarter, editor’s note) of October 1 that it had taken care not to put pressure on the production and delivery system during the third quarter of the year 2024 due to the introduction of a new enterprise resource planning (ERP) system from the end of August The drop in deliveries was therefore completely planned and not. has nothing to do with demand”, Bernstein, however, qualifies.

Beyond volumes, revenues stood at 1.644 billion euros over the period, up 6.5% year-on-year. The increase in turnover was enabled by a better geographical and product ‘mix’ (i.e. a distribution of sales towards regions and models with higher prices) as well as thanks to the ‘personalization’ of models. This “customization” consists, to simplify, of offering tailor-made vehicles to customers according to their tastes and requirements. These customization activities, with better margins than others, constitute an important source of growth and profitability for Ferrari.

One of the rare actions to “hide”

However, Ferrari’s revenues were 0.7% below consensus (1.655 billion euros). In addition, adjusted gross operating income (Ebitda) stood at 638 million euros, up 7.1% year-on-year but 1.2% lower than consensus, notes Royal Bank of Canada.

Earnings per share, at 2.08 euros (+14% over one year) and industrial cash flow, at 364 million euros, conversely slightly exceeded expectations.

The company confirmed its targets for 2024, saying it had “even more confidence” in its targets. In particular, the group plans to generate revenues in excess of 6.55 billion euros, achieve an adjusted Ebitda of at least 2.5 billion euros and generate an industrial cash flow of up to 950 million euros. euros.

On the Milan Stock Exchange, Ferrari shares are suffering after this mixed publication. The stock fell 6.8% shortly before 4:30 p.m.

Analysts, however, tend to recommend ignoring this publication. This is the case with Bernstein. “The decline in shipments is only an illusion, growth is intact,” summarizes the financial intermediary.

Royal Bank of Canada considers that these quarterly results are likely to be received negatively by investors. However, the Canadian bank also judges that a drop in the action would be limited by technical supports, “especially if we consider the lack of attractiveness of the shares of automobile groups at the moment”. “Ferrari is a rare place to hide” in current times, adds the bank.

The Canadian establishment also notes that the company’s revenues should, in the fourth quarter, be driven by the ramp-up in deliveries of the SF90XX models (Stradale and Spider) and by the end of problems linked to the ERP planning system which would remain isolated in the third quarter.