Brokers update target prices upwards and some post-quarterly ratings and outlook 2021 upgrades and Ferrari shares jump to a new all-time high on the stock market. The share hit a record high this morning at € 225.70. It is now trading at € 224.80, up 5.49%, marking the best performance on the Milanese market.
In the third quarter of 2021, the net profit (€ 218 million), EBIT (€ 270 million) and free cash flow (+ € 242 million) of the Rossa were slightly better than analysts’ expectations with the main operating drivers: volumes ( +39 million) and price-mix (+41 million) which more than offset forex (-14 million) and industrial costs / SG & A (-16 million).
The only discordant note, Equita Sim noted, is the slightly lower quality as the balance between capitalized / amortized R&D costs has grown (44 million against 32 million in the third quarter of 2020) and D&A are 10 million lower. Naturally, the 2021 guidance was appreciated, slightly raised compared to the previous indication (upper part of the range): sales from 4.3 to over 4.3 billion, EBITDA from 1.45-1.5 to 1.52 billion, EBIT adjusted by 0.97-1.02 to 1.05 billion, adjusted eps from 4-4.2 to 4.3 euro per share and free cash flow from 0.45 to 0.55 billion.
Bestinver Securities agrees: “Ferrari had a positive quarter, slightly higher than expected in terms of profitability and cash generation. The market reaction yesterday was quite frenetic, probably due to a lower than expected update of the guidance: the consensus 2021 was already at the top of the range “, explained Bestinver, reiterating the buy rating on the Ferrari stock (target price under review).
Now the implicit EBITDA margin of the fourth quarter at 34-35% (36.6% in the first 9 months) “discounts the worst mix and the major opex; not excluding a positive surprise from F1 revenues, not quantified”, continued Equita , recalling that the new CEO, Benedetto Vigna, reiterated the winning strategy of recent years: focus on product / new models, price-mix and partnerships to reduce capex. In addition, it announced that a new Icon will be presented in mid-November and launched in 2022 (Equita thinks in the second / third quarter). There is talk of 300 units with a price of over 2 million. Important advances are expected (Monza will generate over 200 million).
Finally, Vigna remarked on the good collection of orders everywhere, especially in the US and China (but no quantitative indications). Pending the presentation of the new industrial plan on June 16, Equita has slightly revised its estimates on Ferrari except for the 2021-2023 free cash flow, which improved on average by 0.1 billion due to higher advances and lower capex. The target price on the share rises by 7% to 180 euros (confirmed rating hold) as the average between the DFCF method (discounted free cash flow) and the comparison with Hermes (75%). At current prices, the stock trades at a 2022/2023 adjusted price / profit multiple of 46/40 times and at an ev / ebitda of 23/21 times.
After the accounts, Kepler Cheuvreux also raised the target price on the Prancing Horse from 190 to 210 euros, confirming the hold recommendation. The same opinion of Intesa Sanpaolo which raised the target price from € 184 to € 220 following the update of the estimates (+ 8.3% for EPS adjusted 2021 and + 4.5% for EPS adjusted 2022), positively appreciating the CEO’s statements on the acquisition of orders which, together with the presentation of a new Icon in mid-November, provide strong support for 2022. “But, waiting for the Capital Market Day and for better clarity on future spending at the capex level , we confirm our hold rating “, said Intesa Sanpaolo.
Instead, Banca Akros raised its rating but stopped at neutral from the previous veteran, with a target price adjusted from 165 to 210 euros. Third quarter accounts were “slightly better than expected” and guidance was increased, positioning itself in line with consensus estimates at the ebitda, ebit and eps levels, but better on free cash flow, the bank noted. business. “The stock is trading at about 44 times on eps 2022, while the luxury sector average is 42 times, Hermes is trading at 58 times and Brunello Cucinelli at 75. If we apply the average price / profit multiple of luxury on eps 2022 of Ferrari we get a valuation of around 197 euros, while the multiple of Hermes would indicate a much higher level, around 273 euros “, specified Banca Akros. Those who believe that Ferrari can reach and exceed this level and Societe Generale who today raised the rating on the share from hold to buy, setting the target price at 290 euros. The average target price of the consensus collected by Bloomberg thus rises to 196 euros, which is still below the current price on the stock exchange. (All rights reserved)

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