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Ferrari stock surges on upbeat 2024 profit forecast as luxury demand remains strong

Ferrari (RACE) shares are surging after the Italian luxury automaker posted impressive Q4 sales that exceeded expectations and provided a positive outlook for 2024. Additionally, there are rumors circulating about Formula 1 champion Lewis Hamilton joining Ferrari’s racing team, adding to the excitement for fans and investors.

In the fourth quarter, Ferrari reported revenue of 1.52 billion euros ($1.65 billion), surpassing estimates, and experienced an 11% increase in sales compared to the previous year. The adjusted EBITDA reached 558 million euros ($606 million), slightly below estimates. For the full year, Ferrari achieved a record net profit of 1.257 billion euros ($1.3 billion), reflecting a 34% increase.

Ferrari’s optimistic guidance for 2024 anticipates revenue climbing to 6.4 billion euros, with adjusted EBITDA reaching 2.45 billion euros ($2.64 billion). The company remains confident in the continued strong demand for luxury vehicles.

CEO Benedetto Vigna expressed confidence in the company’s achievements, stating, “The record 2023 results, the ambitions that we have on 2024, together with the exceptional visibility on our order book allow us to look at the high end of 2026 targets with stronger confidence.”

Ferrari’s long-term 2026 goals include a product mix of 40% gas-powered cars and 60% hybrid cars, with a targeted EBITDA of 2.5 billion to 2.7 billion euros ($2.72 billion to $2.93 billion) and an EBITDA margin of 38%-40%.

Despite maintaining a conservative outlook for 2024, with deliveries reaching 13,663 cars in 2023, Ferrari is optimistic about the growth potential driven by the Purosangue SUV and hybrid sports cars. The company plans to launch its first full EV in Q4 of 2025.

In addition to the strong financial results and positive outlook, the news of Lewis Hamilton’s potential move to Scuderia Ferrari in 2025 has generated significant interest. Hamilton, a seven-time F1 champion, is reportedly leaving Mercedes for Ferrari, marking a noteworthy change in Scuderia Ferrari’s lineup.

Analyst Garrett Nelson acknowledges Ferrari’s historical conservative guidance but maintains a positive stance, highlighting the company’s stellar earnings track record. He reiterated a Buy rating and raised the price target to $385.

In summary, Ferrari is accelerating with robust financial results, an optimistic outlook, and the potential addition of Formula 1 champion Lewis Hamilton to its racing team.

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