Personal Finance

Ferrari is stuck in neutral

The Italian sports car maker is quickly emerging from the pandemic, but that’s not enough to please investors.


Geoffrey Swaine / Zuma Press

RACE Ferrari -2.47%

he likes to take his time to do things right. That’s a strength in creating cars that justify astronomical prices, but it also means investors can’t expect stocks to suddenly accelerate.

Like the luxury industry that it sometimes seems a part of, the Italian sports car maker is quickly emerging from the pandemic without a hitch. Second-quarter operating profit reported Monday was roughly 15% higher than the same period in 2019, before Covid-19 hit. It sold a similar number of vehicles, but the ones it did sell, like the SF90 Stradale, a plug-in hybrid with a base price north of $ 500,000, were more expensive and profitable than two years ago. June was the best month for orders.

But that’s not enough to please Ferrari investors these days. Even though the numbers beat analysts’ forecasts, the shares fell on a strong day for the market. It is down this year even as the automotive and luxury sectors in general have been ahead.

What investors likely need is better visibility into Ferrari’s long-term prospects as it tackles the challenge of decarbonizing its products. They may not start to get clear answers for almost another year. In June, President John Elkann took the intriguing choice of microelectronics executive Benedetto Vigna to usher Ferrari into a new technological era. On Monday, Elkann set a June 2022 date for the new CEO, who joins in September, to lay out his new strategy. The president told analysts in a call not to expect many details before then.

Elkann also made it clear that Ferrari would not launch a Tesla-style all-electric vehicle until it had mastered the technology. “I think the general opportunity [of full electrification] It is bigger than it was. We just have to be very disciplined not to try to capture it too quickly, but to wait to really have the best and the most exclusive in terms of products that we can deliver, “he said.

Ferrari can afford to have a long-term view because it has a supporting anchor shareholder in Exor, the Agnelli family investment vehicle run by Elkann, which owns about 23% of its share value and 36% of the shares. associated voting rights. Having such patient capital behind them could be invaluable in the manufacturer’s transition to cleaner powertrain technologies, but it means other investors need to be patient, too. Ferrari’s shares may be stuck in neutral for a while yet.

Write to Stephen Wilmot at [email protected]

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