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05 November 2020

Ferrari Races Ahead of Analysts’ Estimates

Ferrari raced ahead of analysts’ estimates in yesterday’s (3rd November 2020) earnings call. The recovery of the automotive sector going into the final quarter of 2020 has also affected the premium brands in the industry. Ferrari generated around US$1.08 per share from US$1bn in sales, where analysts were only expecting 96 cents per share on this level of sales. Ferrari amazingly shipped 2,313 vehicles in the third quarter, showing a recovery to near pre-COVID-19 levels. The fact that this is 161 units fewer than the previous year was not blamed on the pandemic, but the time to roll out visionary projects that the company has planned.

The high-end luxury car manufacturer displayed operating profit margins of 25%, which is 0.2 percentage points higher than the previous year. Overall, investors in the company are very pleased with Ferrari gaining around 11% in share price in 2020, beating both the S&P 500 and the Dow Jones Industrial Average (DJIA). The company’s performance cannot be downplayed, as it increased vehicle shipments by 900 vehicles relative to the previous quarter. The recovery of the company is miraculous since the company did not produce for seven weeks as the Italian factories were closed.

So what does Ferrari have in store for the future? Ferrari clearly has a strong reputation with a long-spanning heritage, but it is certainly not staying in the past. It has created the SF90, a supercar that produces a total of 989bhp. The SF90 is therefore Ferrari’s fastest car to date, looking under the hood, this car has a twin-turbocharged 4.0L V8 engine, three electric motors and batteries that works together seamlessly. This electronic integration is also providing significant environmental benefits with the SF90 emitting just 154g/km of Co2, whereas its non-electric counterpart the Ferrari F8 Tributo produces 294g/km.

Overall we expected Ferrari to perform well, based on its clientele, reputation and nature of their high-end petrol cars. They have spiked our interest in laying out the blueprint for the future of luxury supercars.

Please note that investments and income arising from them can fall as well as rise in value. This communication is for information only and does not constitute a recommendation to buy or sell the shares of the investments mentioned.
 
Ferrari Races Ahead of Analysts’ Estimates
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