Ferrari Earnings: Shipment and Pricing Growth Plus Margin Expansion Continue to Impress

Wide-moat-rated Ferrari RACE posted first-quarter diluted earnings per share of EUR 1.62, a 26% increase over the prior year and EUR 0.14 above FactSet sell-side consensus. First-quarter consolidated revenue of EUR 1.429 billion (also beat consensus by 4%) increased 20%, driven by 23% growth in cars and spare parts revenue. Sales benefited from strong shipment growth and favorable pricing gains, partially offset by a 12% decline in engine revenue on reduced volume shipments to Maserati as contract expiration is this year. Excluding foreign currency translation, revenue improved 18% over the prior year.

Unit volume increased 10% to 3,567 from 3,251 last year. Shipment growth was primarily driven by the Portofino M, 296 GTB, and 812 Competizione models. Ferrari delivered 46% volume growth in the Americas, with unit sales to China and the rest of Asia also posting robust increases of 39% and 19%, respectively. Unit volume growth was partially offset by a 12% decline in EMEA. Adjusted EBITDA margin of 37.6% was a 200-basis-point improvement over the prior year due to an increase in personalized unit sales and favorable country mix, partially offset by negative effects of the Monza SP1 and SP2 model phase-outs in early 2022.

Management reaffirmed its full-year sales guidance of EUR 5.7 billion, representing low-double-digit growth over 2022. The company’s sales visibility remains strong, with orders extending into 2025. Management also expects to deliver over 300 basis points of adjusted EBITDA margin expansion, guiding for a full-year 2023 margin of 38%. Margin expansion is expected to be driven by pricing gains and favorable mix due to higher personalizations. Our 2023 estimates modestly exceed management’s guidance for the year as we remain confident in the company’s near-term trajectory. We expect only a modest time value of money increase to our fair value estimate. Ferrari’s shares are expensive with a 1-star rating, trading at a 39% premium to our EUR 188 fair value.