Ferrari Shares Plunge Toward Worst Day Ever As Guidance Worries Analysts

Core Viewpoint - Ferrari's shares experienced a significant decline in both European and U.S. markets following the release of disappointing earnings guidance, marking the company's worst trading day since its stock market debut [1][2]. Financial Performance - Ferrari's stock fell over 13% to approximately $414 on the New York Stock Exchange and more than 14% in Milan, dropping about €60 to around €357.60, representing the largest single-day loss since its listing in January 2016 [1][2]. - The company projected revenue of €7.1 billion for the current year, an increase from previous forecasts of just over €7 billion, and anticipates revenue of around €9 billion by 2030, with adjusted earnings expected to be at least €3.6 billion, up from just below €2.7 billion [2]. Analyst Insights - RBC Capital analyst Tom Narayan noted that Ferrari's earnings estimates for 2030 were conservative and fell short of the growth rate projected in 2022, indicating a potential downshift in earnings expectations [3]. - CFRA downgraded Ferrari's stock to a "sell" and reduced its price target from $475 to $350 due to concerns over slowing growth [4]. Management Commentary - Ferrari CEO Benedetto Vigna acknowledged that expectations for higher revenue were not met, emphasizing the importance of executing achievable goals [5]. Market Reactions - While some analysts expressed concerns, others remained optimistic about Ferrari's growth potential. JPMorgan analysts expressed confidence in the company's ability to meet long-term goals, citing strong demand [5]. - Deutsche Bank upgraded Ferrari's stock to a "buy" and raised its price target to €520, reflecting a more positive outlook [5]. Electric Vehicle Strategy - Ferrari announced a reduction in its electric vehicle production plans, now targeting a lineup of 40% internal combustion engines, 40% hybrids, and 20% fully electric cars, down from earlier projections of 40% EV sales [6]. - The company introduced its first electric vehicle, the "Elettrica," with deliveries expected to begin in late 2026 [6].