Ferrari’s conservative outlook has triggered the familiar pattern of share price volatility that long-term investors recognize, though the current 24% decline represents one of the more significant drops in recent memory. The luxury automaker’s latest profit forecast, announced during last week’s Capital Markets Day, fell below market expectations despite representing increases from previous targets, according to recent analysis of the company’s financial guidance.
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Ferrari’s Financial Forecast Pattern
The current scenario follows Ferrari’s established pattern of setting conservative targets that the company typically exceeds in subsequent quarters. This time, however, the decline has been more pronounced, with shares falling to €324.9 by midday Tuesday, representing nearly a quarter below pre-meeting peaks. The timing coincided with broader market weakness, amplifying the downward pressure on the stock.
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Industry experts note that Ferrari’s guidance for 2025 includes adjusted EBITDA of €2.72 billion or more, up from the previous target of €2.68 billion. Revenue projections for this year were raised to equal or exceed €7.1 billion, measured in euros, from the prior €7 billion threshold. Despite these increases, investors expected more aggressive targets given the company’s growth trajectory.
Electric Vehicle Strategy Adjustments
The highly anticipated reveal of Ferrari’s first electric vehicle, the Elettrica, disappointed enthusiasts who expected a full unveiling. Instead, the company showed only the vehicle’s base platform, highlighting the battery architecture. The Elettrica is scheduled to launch within the next year, with a second EV expected by 2030.
More significantly, Ferrari revised its electric vehicle production targets downward, now expecting EVs to comprise half of the previously forecast 40% of production by 2030. This adjustment reflects both technical challenges and market considerations, particularly as global clean technology competition intensifies according to additional coverage of the sector.
Analyst Perspectives on Recovery Potential
Major financial institutions remain bullish despite the share price decline. Morgan Stanley characterized the plunge as “a rare chance to buy,” reiterating their overweight rating. The bank suggested that Ferrari’s earnings growth likely needs to double the company’s 5% target, expressing confidence that this would occur.
HSBC Global Investment Research echoed this sentiment, attributing the conservative guidance to management style rather than fundamental business weakness. “When we review Ferrari’s new guidance, it is hard to not see it as very prudent,” the HSBC report stated, noting that customer growth continues to outpace volume projections.
Market Context and Vehicle Value Considerations
Beyond the specific guidance, investors expressed concerns about potential vehicle depreciation trends and residual values, particularly as the company transitions toward electrification. These concerns emerge amid broader technological shifts affecting the automotive sector, including developments in adjacent fields where quantum computing advancements are creating new opportunities according to related analysis.
Key factors supporting analyst optimism include:
- Consistent historical pattern of exceeding conservative guidance
- Strong brand equity and pricing power in the luxury segment
- Growing waiting lists despite production constraints
- Proven ability to navigate industry transitions while maintaining exclusivity
Long-Term Growth Trajectory
Looking toward 2030, Ferrari projects revenue of €9 billion and EBITDA of €3.6 billion or more, targets that disappointed investors hoping for more aggressive growth. However, the company’s track record of underpromising and overdelivering provides context for these projections.
The current share price decline represents the most significant test of this pattern in recent years, with the 24% drop exceeding typical reactions to Ferrari’s conservative guidance. Whether the anticipated recovery materializes will depend on the company’s ability to demonstrate progress toward its electric vehicle goals and maintain its premium positioning in the evolving luxury automotive landscape.
