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Ferrari shares race ahead after fast start to 2019

Published 05/07/2019, 08:59 AM
© Reuters. FILE PHOTO: New Ferrari Portofino is displayed during the Frankfurt Motor Show (IAA) in Frankfurt

By Giulio Piovaccari

MILAN (Reuters) - Ferrari (NYSE:RACE) beat forecasts on Tuesday with a 14 percent rise in first-quarter core earnings, boosting its shares on growing expectations the Italian luxury carmaker might soon raise its full-year financial targets.

Milan-listed Ferrari shares rose as much as 5.7 percent on the results, which were driven by strong sales of the 8 cylinder Portofino model and the 812 Superfast among higher-margin 12 cylinder models. The stock was up 4.4 percent at 1215 GMT.

Ferrari stuck to its full-year targets, but analysts said an increase might be in store.

Current targets look "extremely conservative", Morgan Stanley (NYSE:MS) analysts said in a note.

Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) came in at 311 million euros ($348 million) in January-March, above the average forecast of 284 million euros in a Reuters poll of analysts.

Net revenues rose 13 percent to 940 million euros, topping the average estimate of 864 million euros. Shipments rose in all regions, with China and America up 79 percent and 27 percent respectively.

Jefferies analysts described the results as "impressive", adding the first-quarter performance more than supported current consensus expectations for the year, which were already at the top end of the company's guidance range for adjusted EBITDA. Based on the results, revenue growth might come in at around 7 percent, well above the current annual forecast, they added.

Ferrari currently expects adjusted EBITDA this year to rise around 10 percent to 1.2-1.25 billion euros. Sales are seen growing more than 3 percent to top 3.5 billion euros.

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Last year's plan set a target for adjusted EBITDA in excess of 1.3 billion euros in 2020, but Chief Executive Louis Camilleri said earlier this year he was "very bullish" and might raise it, betting on new models and special editions at premium prices to lure customers.

Ferrari is starting to ship its first 488 Pista Spider models this quarter, while the new Ferrari Monza limited series will be shipped starting from fourth quarter.

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