After the wheelie, the Cavallino remains standing. In the aftermath of accounts that drove the prices up more than 7%, shares of Ferrari it does not suffer the repercussions of profit-taking and remains above the psychological threshold of 100 euros per share. At the end of the morning, the Reds were just above parity in Piazza Affari: +0,3%, at 103,5 euros. Since the beginning of the year, the progress is 17%.
Analysts judged positively the numbers of the last few months of 2017, results higher than expected both in terms of revenues and profit, and were also impressed by the future targets indicated by the company.
In fourth quarter 2017, Ferrari posted revenues of 840 million, up 0,5%, and net income of 136 million, up 23%. The debt, amounting to 473 million, was instead in line with expectations. As regards 2018, Ferrari's top management declared that they expected an EBITDA exceeding 1,1 billion euros, a level higher than market expectations, on a turnover of 3,4 billion, the latter in line with that of last year and lower than analysts' forecasts, around 3,6 billion until yesterday.
Furthermore, the debt should slip below 400 million at the end of the year, without however including the positive impact linked to the so-called Patent Box. The house also announced that it will invest around 550 million euros for the new models, a level of around 100 million dl above the market consensus. But that is not all. Ferrari's top management took the financial community by surprise by also announcing long-term targets: by 2022, EBITDA should rise above 2 billion, free cash flow should improve to 1,2 billion, while debts should go to zero already by 2021.
"With this ebitda in 2022 we estimate net profit above 1,1 billion, with an average annual increase of around 16%", commented the analysts of Equity. In practice, the profit will tend to double compared to the 2017 level, equal to 537 million. Among other things, during the conference call, the president Sergio Marchionne said that the ebitda of 2 billion in 2022 will be an essential key point also from the volumes, which in any case will not be doubled.
Inevitably, the analysts deduced, margins on the EBITDA will have to rise to 35-36%, levels similar to those of the top of the luxury range, such as Hermes for example. In 2017, the ebitda margin of the Reds stood at 31%.
"This supports our vision of the uniqueness of the equity story in which management is able to manage all the main variables, except that of exchange rates", commented the Equita experts who, however, also focused their index on the risks horizon linked mainly to the expected launch of the Ferrari SUV and a possible 'watering down' of the brand. However, the experts reiterated the 'Buy' recommendation on the Ferraris, raising the price target by 9% to 120 euros.
Analysts from have also revised upwards the valuations of the company Kepler Cheuvreux, raising the target price from 80 euros to 110 euros, so as to reflect long-term growth estimates. In the end Banca Akros, despite being more cautious ('Hold') on Ferrari, has revised the target price from 107,5 euros to 110 euros per share.
