AUTONEWS

Better 2025 Ferrari Profits Expected Despite Tariff, Economic Ructions

The traditional auto industry is in turmoil and as usual nothing seems to trouble legendary Italian luxury sports car maker Ferrari, expected to improve profits again in 2025.

The idea that Ferrari rolls serenely on, floating over economic downturns, tariff wars and potholes might seem contradictory given its usual wailing, screeching V-12 resonance. But in 2025, Ferrari’s first electric sports car might well do just that by filling your rear-view mirror and disappearing in a silent instant.

Ferrari’s profits rose to €2.56 billion ($2.67 billion) last year. That’s up modestly from 2023’s EBITDA (earnings before interest, tax, depreciation and amortization) of €2.28 billion ($2.37 billion), and a slight improvement on the forecast of €2.45 billion ($2.55 billion).

Ferrari said its order book is full through 2026, and that all the production of 799 €3.6 million ($3.75 million) F80 supercars have been sold.

“We’re not into an electric transition, we’re rather doing electric addition,” CEO Benedetto Vigna said at a presentation of the 2024 financial results.

The EV will be launched on schedule on October 9 and is expected to cost more than €500,000 ($520,000). Five other new models will be launched this year, in addition to pure gasoline, gasoline hybrids, plug-in hybrids, and now electric models.

Analysts were impressed and expect more of the same profit growth for the foreseeable future.

“We continue to view Ferrari as uniquely positioned, defensive business with the order book extending well into 2026, that can achieve high single-digit top-line growth and double-digit profit growth with relatively low volatility to earnings,” said investment bank Morgan Stanley.

Morgan Stanley recommends Ferrari as an “overweight” investment.

Investment researcher Bernstein, in a report entitled “Setting a new baseline for profitability” said fat profit margins will get fatter.

“A year ago Ferrari said it was increasingly confident of achieving the upper end of its 2026 target margin corridor of 27-30%. Ferrari’s 2025 guidance is already for about 29.0%. Considering that 2026 will include a full year of F80 deliveries, that upper end or 30% margin target looks even more achievable,” Bernstein said in the report.

Bernstein rates Ferrari as an “outperform” stock.

Investment bank UBS joined in the praise and pointed out in a report that Ferrari, unusually, expects the first half of 2025 to be more positive than usual.

“Ferrari results proved once again the strength of the brand and business model, as high-end demand continues to exceed supply despite the macro conditions,” UBS said.

“The first half weighted outlook de-risks the year and leaves room to potentially surprise on the upside in the second half. In addition, six model launches provide plenty of catalysts, with the most important being the capital markets day on 9th October when the next mid-term plan will be unveiled, together with the long-awaited Ferrari Elettrica,” UBS said.

UBS rates Ferrari as a “Buy”.

In 2024 Ferrari opened a new production line at its Maranello, Italy headquarters and was at pains to point out this didn’t signal a change in its long-established policy of never making quite enough snarling, howling, beguiling sports cars for the super-rich to satisfy demand.

Ferrari said the extension would add an additional production line to improve production efficiency, not increase output drastically. The new facility was said to have cost about €200 million ($208 million). Ferrari management denied a Reuters report that this would allow annual sales to reach around 20,000, up from 2023’s 14,000.

Neil Winton