Ferrari Shares Sink by Most Since 2016 on Cautious Forecast

Core Viewpoint - Ferrari NV shares experienced a significant decline after the company issued cautious forecasts regarding future earnings, disappointing investors despite the launch of its first electric vehicle [1][2]. Financial Outlook - Adjusted earnings are projected to rise to at least €3.6 billion ($4.2 billion) by 2030, up from €2.72 billion this year, indicating a slower growth rate compared to previous forecasts made three years ago [1]. - The company has raised its net revenue guidance for this year to equal or exceed €7.1 billion, an increase from the prior guidance of €7 billion or more [5]. - Adjusted EBITDA for this year has been increased by 1.5% to at least €2.68 billion [5]. - For 2030, Ferrari's adjusted EBITDA margin is expected to be over 40%, which is below analysts' average estimate of 42% [5]. Market Reaction - Ferrari's stock fell as much as 16%, marking the steepest drop since its listing in Milan in January 2016, and is currently down about 12% for the year [2]. - Trading of Ferrari shares was temporarily halted due to volatility following the announcement [2]. Analyst Expectations - Analysts had high expectations leading into the investor day, with the highest proportion of buy ratings in five years [3]. - Some analysts anticipated that a potential lowering of electric vehicle targets would enhance Ferrari's earnings, expecting ambitious mid-term targets to be unveiled [4]. - The company's projections were viewed as underwhelming compared to high expectations, with targeted free cash of about €8 billion over five years seen as low against an expectation of €9 billion [6].