Ferrari now worth more than General Motors and Ford

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A Ferrari is parked outside the New York Stock Exchange to celebrate the IPO of Ferrari Automotive Company on October 21, 2015 in New York.

Andrew Burton | Getty Images

Ferrari is now worth more than General Motors or Ford, after its market value jumped to around $ 30 billion on Monday morning.

Ferrari’s shares jumped 7% on Monday after the sports car maker based in Maranello, Italy, announced better-than-expected earnings. Despite the closure of its plant in March, total shipments of the company’s cars increased 5% to 2,738. Sales fell only 1% to $ 1.02 billion, better than the $ 852 billion expected by analysts.

The company also restarted its factories in Maranello and Modena on Monday and is expected to resume full production on Friday.

Even though Ferrari only makes 10,000 cars a year, compared to General Motors’ production of around 7.7 million vehicles last year, investors are betting that the brand name and high prices and profit margins from Ferrari are likely to fuel the stock during the coronavirus crisis better than other car brands.

Ferrari’s market capitalization hit $ 30.1 billion early Monday after falling to $ 29.8 billion later today. General Motors’ market capitalization fell to less than $ 29.3 billion while Ford’s market capitalization fell to $ 19.2 billion. Fiat Chrysler, which ran Ferrari in 2015, saw its market capitalization drop to less than $ 13 billion. Ferrari’s share price has more than tripled since its IPO.

As Ferrari cut profit forecasts for the year and warned of continued weakness in Formula 1 and other segments in the second quarter, investors were cheered by its relatively light revisions for the year. to come up.

In April, Ferrari announced a dividend of 1.13 euros ($ 1.23) per share, an increase of 10%. In its earnings announcement, Ferrari said it was lowering its net revenue estimates between $ 3.4 billion and $ 3.6 billion ($ 3.7 billion to $ 3.9 billion) from $ 4.1 billion. euros ($ 4.5 billion) previously. It reduced its forecast for adjusted profit before interest, taxes, depreciation and amortization to a high range of 1.2 billion euros (1.31 billion dollars), against a high range of 1.43 billion euros ( $ 1.56 billion).

The value of the Ferrari brand and the demand for its sports cars, priced between $ 215,000 and more than $ 1 million, allowed the company to maintain margins of 24%, compared to most car manufacturers, whose margins are less than 5%.

In a call with investors, Ferrari CEO Louis Camilleri said that even though the United States has seen “several cancellations” of car orders in the United States and Australia, “so far, no red light flashes in any geography. “

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