Ferrari’s (NYSE:RACE) Luxury Supercar Demand Spikes

Ferrari’s (NYSE:RACE) Luxury Supercar Demand Spikes

Ferrari’s (NYSE:RACE) Luxury Supercar Demand Spikes


Ferrari (NYSE:RACE) the Italian supercar maker plans to boost production by 2Xing assembly shifts to 2 a day in Y 2018 as deliveries are on pace to reach its 9,000-vehicle target a year earlier than schedule.

The increase is part of CEO Sergio Marchionne’s, 65 anni, plan to boost profit by expanding Ferrari’s line-up while maintaining the exclusivity of its $200,000 Portofino (seen above) -and-up models.

Mr. Marchionne will present Ferrari’s latest mid-term strategy early next year, his final one at the helm of the Italian iconic marque.

The plan will include Ferrari’s 1st-ever FUV (Ferrari Utility Vehicle) as it targets annual sales exceeding a self-imposed 10,000-car limit that until now has enabled it to operate under less-stringent fuel-economy rules.

Goals include 2Xing operating profit to about $2.35-B by Y 2022.

Ferrari raised its Y 2017 profit target last month as its Limited Edition Supercars, including the HyperSupercar FXX K Evo racing model (seen above), help it achieve a long-held profit goal 2 years early.

Adjusted earnings before interest, taxes, depreciation and amortization will total about EUR1-B this year.

Ferrari planned to reach full-year sales of 9,000 cars in Y 2019, according to filings for the carmaker’s IPO in October 2015.

Ferrari stock has more than 2X’d since its debut on the NYSE, and its 83% gainer this year marks the best performance among all automakers in Y 2017, to value the company at $20.1-B.

Sales growth is being driven as the population of wealthy individuals expands.

The number of millionaires worldwide 36% to 13.6-M people in the 10 years through Y 2016 and may rise another 37% in the following decade, according to the Wealth Report by real estate company Knight Frank.

Notably, one need be much more than a millionaire to afford a Ferrari Supercar.

The number of billionaires increased 45% in the period, boosted by gains in the Asia-Pacific area.

Ferrari’s production could increase about 7% to 9,000 cars in Y 2018 from about 8,400 this year.

Ferrari has a waiting list of more than 12 months for most of its models.

To preserve its exclusivity, Ferrari should always sell 1 car less than the market demand, founder Enzo Ferrari declared.

A Ferrari spokesman declined to comment.

Meeting the stated goal will likely drive Ferrari share to 200 and beyond. I am Bullish to Very Bullish long term.

Symbol Last Trade Date Change Open High Low Volume
NYSE:RACE 106.99 12 December 2017 0.55 106 107.38 105.93 486,584
HeffX-LTN Analysis for RACE: Overall Short Intermediate Long
Neutral (-0.16) Neutral (-0.11) Neutral (-0.21) Neutral (-0.15)

Stay tuned…

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